Liontrust Assessment of Value Report - Flipbook - Page 142
Liontrust MA Strategic Bond Fund
The Fund, which is managed by the Multi-Asset team, seeks to
achieve a return for investors based on a combination of capital
growth and income. The underlying funds will primarily (meaning
at least 70%) invest in bonds denominated in (or hedged back to)
pounds sterling.
Performance
Overall value
assessment
We have evaluated the Fund
against all seven criteria in
our assessment of the value
it provides to investors. We
are keeping the Fund under
close review as a result of
the Amber for performance;
we have identified areas for
improvement, and we are
taking actions to address
these. While the Fund has
received an Amber for
comparable market rates, we
have concluded that the fees
charged reflect the active,
high conviction approach
adopted by the Fund, and
the fees charged for the level
of service are considered
to be reasonable. Overall,
we consider the Fund is
delivering value.
We have assessed the investment performance of the Fund against its stated
investment objective that is 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 delivered a return of 10.2% over the last five years, meeting its stated
investment objective of achieving a return based on a combination of capital
growth and income in absolute terms.* It has, however, lagged the average returns
of its peers in the IA Strategic Bond sector, with the benchmark returning 20.0%.
The IA UK sector for strategic bond funds has a wide range of funds including
a number of funds with more aggressive risk appetites. This Fund does target
a lower risk level than that of the sector and therefore it will always struggle to
compete with those funds taking more risk although the investment adviser still
believes the sector remains the most appropriate one for comparison for investors.
The other funds in the comparison sector take a direct investment approach
rather than be a fund of funds and we believe further consideration needs to be
made to ensure that the Fund’s objective, strategy and policy remain feasible
and appropriate given the constraints of this approach.
Despite further work on improving the investment process over the last year to
help the Fund meet its objectives, including the inclusion of alternative assets, it
continued to underperform the index over the last 12 months.
The inclusion of these alternative assets, however, did help boost performance.
The largest contribution came from asset backed securities and loans, with
property also providing positive returns.
However, returns from UK and global government bonds were muted, and so
the overall performance was disappointing. We still believe in the diversification
and capital preservation benefits of these asset classes and the Fund did gain
from the relatively higher risk areas of bonds, including high yield, corporate
and strategic.
We will continue to closely monitor the performance of the Fund particularly with
the changing interest rate environment.
Go back to the Summary
of the Assessment of
Value table
This document is intended to be for information purposes only. It is not
marketing material.
*Source: Financial Express, as at 31.08.21, total return.
142 - Liontrust Assessment of Value Report