Liontrust Assessment of Value Report - Flipbook - Page 19
Liontrust Special Situations Fund
The Fund has been managed since launch in November 2005
by Anthony Cross, who was joined by Julian Fosh in 2008. The
Fund aims to deliver capital growth over the long term (5 years or
more) through using the Economic Advantage investment process.
The process seeks to identify 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. The Fund invests at least 90% of the portfolio in
companies incorporated, domiciled or which conduct significant
business in the UK.
Performance
We have assessed the investment performance of the Fund against both its stated investment
objective, as well as against the benchmarks that are set out in its prospectus. We considered
whether the Fund has performed how we and investors would expect it to, given the market
conditions it has been operating under and its investment philosophy, strategy and process.
We have concluded that the Fund has met or exceeded expectations.
Quality of service
Our assessment has considered the range and quality of services experienced by investors.
We have concluded that the quality of services provided by Liontrust is better than or in line
with expectations across all the UK-domiciled funds. This has been evaluated through a
detailed review of the services we provide, our engagement with investors, communications
and governance, and confirmed through our investor survey.
General costs of authorised fund manager
We have reviewed the breakdown of the charges of the Fund’s Ongoing Charges Figure (OCF)
and our explicit transaction costs. Our assessment has concluded that the costs of services
provided to the Fund are being appropriately managed. Our annual review of this Fund’s
charges has led to a reduction in its Administration Fee of 0.01% and we are seeking to move
investors in the retail unit class of this fund free of charge into an alternative unit class with a lower
fee. Where we can, we are transferring investors on a compulsory basis and have notified them
accordingly. Where further information is required, we will be writing to investors to explain how
we will be proceeding. Research costs have been absorbed by Liontrust and are not charged to
the Fund. We will continue to review the costs and charges of the Fund at least annually.
Comparable market rates
We have assessed the charges of this Fund against comparable funds in the market. The OCF
of the highest charging unit class of this Fund is higher than those of many comparable funds
and we have therefore undertaken a detailed evaluation. As a result of our annual reviews of
fund charges, the Administration Fees of the Fund were recently reduced. Additionally, we are
seeking to move investors in the retail unit class of this Fund to an alternative unit class with a
lower OCF.
Overall value
assessment
We have evaluated the Fund
against all seven criteria in
our assessment of the value
it provides to investors.
While the Fund has received
an Amber for comparable
market rates, we have
concluded that the Fund
has performed in line with
or exceeded expectations,
delivering overall value to
investors including through
the investment performance.
Economies of scale
Our assessment has considered whether we are able to generate efficiencies to achieve
economies of scale and if such cost savings have been passed onto our investors. The Fund
benefits from a fixed Administration Fee model, which, as well as providing clarity in relation
to fund costs to investors, allows cost savings achieved from an increase in the Fund’s
size to be directly passed to investors through the application of a discount. As the Fund
grows in assets above £500 million, the fixed Administration Fees are reduced by up to a
maximum of 0.06% above £5 billion in assets. The Fund benefits from a volume discount of
0.06%, passing on the available economies of scale to investors. Overall, with the growth
in Liontrust’s assets under management over the past few years, our investors have been able
to benefit from the savings created.
Comparable services
We have assessed the charges of this Fund against other Liontrust funds and segregated
mandates that have a similar investment objective, strategy and policy. Our assessment has
concluded that investors in this Fund are charged appropriately relative to investors in other,
similar Liontrust funds and segregated mandates.
Classes of shares or units
Our assessment has considered whether investors are invested in the most appropriate share
or unit class that is available to them. Based on the information available to us, our review
concluded that it is appropriate for investors in this Fund to be invested in the unit class they are
currently invested in. Additionally, as noted above, we are seeking to move investors in the retail
unit class of this fund free of charge into an alternative unit class with a lower fee. The OCF of the
Institutional and Advisor classes of this Fund is lower than many of their peers. We will continue
to monitor the charges of our classes to ensure they meet the needs of our investors.
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