Liontrust Assessment of Value Report - Flipbook - Page 22
Liontrust UK Micro Cap Fund
The Fund has been managed since launch in March 2016 by
Anthony Cross, Julian Fosh, Victoria Stevens and Matt Tonge, and
they were joined by 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. Companies
held by the Fund must have a minimum 3% equity ownership
held 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 of 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.
Comparable market rates
We have assessed the charges of this fund against comparable funds in the market. Due
to there being only one class available for this fund, we have compared the fund’s charges
against other funds’ institutional classes rather than retail classes. Having considered the
pricing against other institutional classes, we have concluded that the OCF of this Fund is
higher than those of many comparable funds’ institutional classes and, although lower than
most retail classes, we have therefore undertaken a more detailed evaluation. As a result of
our regular annual review of fund charges, the Administration Fees of the Fund were recently
reduced. Bearing in mind that only one class is available for investors, our assessment has
concluded that the overall charge for this Fund remains reasonable in light of the fund’s
objective and strategy, but since it is higher than many competitors we have decided to
highlight it as Amber.
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. 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
There are no Comparable Services provided for this Fund.
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. This Fund has one unit class and, based on the information
available to us, our review concluded this is appropriate for investors in this Fund. We will
continue to monitor the charges of our classes to ensure they meet the needs of our investors.
22 - Liontrust Assessment of Value Report
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
its investment performance.