Liontrust Assessment of Value Report - Flipbook - Page 51
Liontrust Japan Opportunities Fund
The Fund is managed by Chris Taylor and aims to generate capital
growth over the long term (5 years or more). The Fund invests at
least 80% in shares of Japanese companies. These are companies
which, at the time of purchase, are incorporated, domiciled, listed
or conduct significant business in Japan.
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. The fund has significantly
underperformed over the last five years versus the index and sector and provided an overall negative
return to investors over the period. The long term performance of the fund has been mainly driven
by the currency hedging of the Yen rather than the equity investments in the fund which has been in
place for a number of years and has, at times, provided significant relative returns. The performance
since inception shows significant capital growth as well as relative outperformance versus both the
index and sector. Investors are aware of the fund’s currency positioning and the fund’s total return has
performed as expected based on the movements of the Yen and the equity performance has been
broadly in line with the market. Due to the scale and length of the period of underperformance, the
conclusion must be that the fund has not met investors’ expectations and should be monitored.
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 us
to seek 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, we are seeking to move investors in the retail share class of this Fund to an alternative
share 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. 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.
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
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 or unit 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 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.
Liontrust Assessment of Value Report - 51