Liontrust Assessment of Value Report - Flipbook - Page 54
Liontrust US Income Fund
The Fund is managed by George Boyd-Bowman and aims to
generate capital growth over the long term (5 years or more).
The Fund invests at least 80% in shares of US companies. These
are companies which, at the time of purchase, are incorporated,
domiciled, listed or conduct significant business in the US. Stocks are
selected with a focus on income and the potential for capital growth.
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
Manager of the Fund was changed less than five years ago. The Fund has met its Income targets
over this period, but its performance versus the benchmark and sector has struggled. Much of
the performance of the US markets have been driven by stocks with little or no dividends (such
as technology stocks) and this has meant the income focus of the Fund has held back its capital
performance. We have concluded that the Fund has broadly met investors’ expectations given
these constraints, providing a good income as well as capital growth.
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 0.12%. 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 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. Our assessment has concluded that the overall charge
for this Fund remains reasonable in light of the fund’s objective and strategy.
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. We will continue to monitor the charges of our classes to ensure they
meet the needs of our investors.
54 - 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 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.