Profit in all conditions via Liontrust Special Situations

A number of other uncertainties face markets in the coming months, too, including the outcome of the US election and growing debt in China. So the recent rally might not continue for long.

"Many of the fund managers I speak to are starting to suggest the easy money has been made out of the Brexit bounce, and there is caution as the downside risks when we actually start the process of exiting the EU are yet to come through," says Darius McDermott, managing director of research company FundCalibre. "For this reason, I would particularly suggest that now is not the time to buy a market tracker. The recent surge is making the indices look expensive and you risk buying right as we are on the cusp of renewed volatility. I'd recommend a few carefully chosen active funds, whose managers will be looking to exploit this volatility, rather than simply being taken for the ride."

So a good option could be IC Top 100 Fund Liontrust Special Situations (GB00B57H4F11), which we also highlighted in our recent guide to Top managers for volatile markets in the issue of 24 June.

Liontrust Special Situations has delivered strong long-term returns, beating the FTSE All-Share and FTSE 100 indices over one, three and five years. It also beats most of its sector peers, making it the fourth best-performing fund out of more than 250 over one year, and it is also in the first quartile in terms of performance over three and five years.

The fund can invest across the FTSE All-Share Index regardless of size or sector, although it typically has a small- and mid-cap bias. Its managers, Anthony Cross and Julian Fosh, like companies with a durable competitive advantage that allows them to defy industry competition and sustain a higher-than-average level of profitability for longer than expected.

"Another important factor is how key employees are motivated, with the preference being through direct ownership of the company's equity," explain analysts at FundCalibre. "The resulting portfolio consists of companies that can grow their earnings independently of the wider economy."

This could be a useful attribute in the uncertain environment ahead, and typically leads the fund to less economically-sensitive sectors and away from areas such as banking and mining. Liontrust Special Situations has exhibited lower volatility than the UK stock market, which FundCalibre says is consistent with its investment process and portfolio composition.

It also has a reasonable ongoing charge of 0.88 per cent.

However, its managers' preference for companies that can deliver earnings growth, despite economic headwinds, means the fund is likely to underperform strongly rising markets.

But regardless of short-term market rallies, this fund has delivered strong cumulative returns. So if you are a long-term investor looking for consistent returns from the UK market, Liontrust Special Situations looks like a good option whatever conditions lie ahead. Buy.

Source: Morningstar as at 26 Sep 2016, *Liontrust

Performance

Source: Morningstar as at 25 Sep 2015

Top 10 holdings as at 31 Jul 2016

Sector breakdown (%)