Liontrust Assessment of Value Report - Flipbook - Page 40
Liontrust China Fund
The Fund is managed by Ruth Chambers and aims to generate
capital growth over the long term (5 years or more). The Fund
invests at least 80% in shares of Chinese companies. These are
companies which, at the time of purchase, are incorporated,
domiciled, listed or conduct significant business in China, Hong
Kong or Taiwan.
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.
Although the Fund has underperformed the benchmark over one, three and five years, we have
taken into account the fact the current fund manager has only been responsible for the Fund since
May 2018 and will continue to review the performance of the Fund in more detail as sufficient
performance data becomes available so as to draw a valid conclusion about the effectiveness
of the investment process.
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 0.13% and we are seeking
to move investors in the retail share class of this fund free of charge into an alternative share
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 share class of this Fund is higher than those of some 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 share class of this Fund to an alternative share class
with a lower OCF.
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. Based on the information available to us, our review
concluded that it is appropriate for investors in this Fund to be invested in the share class they
are currently invested in. Additionally, as noted above, we are seeking to move investors in
the retail share class of this fund free of charge into an alternative share class with a lower
fee. The OCF of the Institutional class of this Fund is lower than many of its peers. We will
continue to monitor the charges of our classes to ensure they meet the needs of our investors.
40 - 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. We
are seeking to move certain
investors to a share class with
a lower charge and keeping
the Fund under close review
as a result of the Amber for
the comparable markets rates
and performance criteria.
Whilst we have identified
areas for improvement and we
are taking actions to address
these, overall we consider the
Fund is delivering value.