Liontrust Assessment of Value Report - Flipbook - Page 58
Liontrust Global Income Fund
The Fund has been managed since March 2009 by James InglisJones, and he was joined by Samantha Gleave in 2012. The
Fund seeks to deliver a high level of income with the potential for
capital growth over the long term (5 years or more) by using the
Cashflow Solution process to identify and invest in companies
globally. The aim of the Fund is to deliver a net target yield of
at least the net yield of the MSCI World Index each year. The
managers seek to achieve this by investing in high-yielding stocks
with unusually strong cash flows where investors have low profit
expectations.
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 delivered one of the highest yields for a global income fund as well as capital
growth over the previous five years and met its investment objective. The investment process
looks to invest in high yielding stocks that also have good cashflow. In recent years, there
have been very few stocks that have met the yield criteria in the US and this has meant that the
Fund has been underweight the strongly performing US markets and this has been the main
cause of relative underperformance. The Fund has delivered its high income target as well as
capital growth, although it has significantly underperformed both the benchmark and sector
on a total return basis over the last five years. Investors are aware of the Fund’s positioning
and its high yield.
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 costs and charges of the Fund are
reviewed on an ongoing basis. Our annual review of this Fund’s charges has led to a reduction
in its Administration Fee of 0.01% and we are seeking to move investors in the retail unit class
of this fund free of charge into an alternative unit class with a lower fee. Where we can, we will
transfer investors to the alternative unit class on a compulsory basis. 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. 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. 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 unit class they are currently invested
in. Additionally, as noted above, we are seeking to move investors in the retail unit class of this
fund free of charge into an alternative unit class with a lower fee. We will continue to monitor the
charges of our classes to ensure they meet the needs of our investors.
58 - 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 performance, we
understand why and have
explained the reasons for
this, concluding that the Fund
has performed in line with or
exceeded expectations and
is delivering overall value to
investors.