Liontrust Assessment of Value Report - Flipbook - Page 21
Liontrust UK Smaller Companies Fund
The Fund has been managed by Anthony Cross since 1998, and he
was joined by Julian Fosh in 2008, Victoria Stevens and Matt Tonge
in 2015, and Alex Wedge in 2020. The Fund aims to deliver capital
growth over the long term (5 years or more) through using the Economic
Advantage investment process. All smaller companies in the Fund
must have a minimum 3% equity ownership by senior management,
which the fund managers believe motivates key employees, helps to
secure a company’s competitive edge and leads to better corporate
performance. The Fund invests at least 90% of the portfolio in companies
incorporated, domiciled or which conduct significant business in the
United Kingdom (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. The annual review of the
fixed Administration Fee for this Fund completed as part of our normal governance processes
has led to the reduction in its Administration Fee by 0.01%. 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.
Overall value
assessment
We have evaluated the Fund
against all seven criteria in
our assessment of the value
it provides to investors. We
have concluded that the Fund
has performed in line with
or exceeded expectations,
delivering overall value to
investors.
Comparable market rates
We have assessed the charges of this Fund against comparable funds in the market. Our assessment
has concluded that the charges of this Fund are in line with other comparable funds available in
the market. Furthermore, as a result of our annual review of fund charges, the Administration Fees
of the Fund were recently reduced.
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 0.02%,
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. The OCF of the Institutional class of this fund is higher than many of its peers but our assessment
has concluded that the pricing of this unit class is appropriate given the intended investors and
terms of the unit class. We will continue to monitor the charges of our classes to ensure they meet
the needs of our investors.
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