Liontrust Assessment of Value Report - Flipbook - Page 68
Liontrust Asia Income Fund
The Asia Team moved to Somerset Capital Management at the
end of October 2020. The Asia Team will continue to manage
the Liontrust Asia Income Fund for the next few months using the
same investment process and with the same Fund objective. The
Fund will move to Somerset early in 2021.
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 on its yield objective, providing a income higher than the 110% of
the market yield as well as capital growth over the last five years, although the total return of
the Fund has underperformed its sector benchmark and its index benchmark. This is primarily
a result of the investment style (i.e. investing in dividend paying stocks) which has led to the
Fund not holding the two best performing large cap stocks in the index (Alibaba and Tencent).
Given the Fund’s Objective, strategy and positioning, which investors are aware of, we
have concluded that the Fund has met expectations but future outperformance relative to the
benchmark will continue to be dependent on the success of higher dividend paying stocks.
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 Fund’s charges are
reasonable and the costs of services provided to the Fund are being appropriately managed.
Research costs have been absorbed by Liontrust and are not charged to the Fund.
Comparable market rates
We have assessed the charges of this Fund against comparable funds in the market. Our
assessment has concluded that, overall, the charges of this Fund are in line with other
comparable funds available in the market.
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
We have assessed the charges of this Fund against other Liontrust funds and segregated
mandates that have a similar investment objective, strategy and policy. Our assessment has
concluded that investors in this Fund are charged appropriately relative to investors in other,
similar Liontrust funds and segregated mandates.
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.
68 - 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
have concluded that the Fund
has performed in line with
or exceeded expectations,
delivering overall value to
investors.