Liontrust Assessment of Value Report - Flipbook - Page 150
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. Liontrust merged the
Fund with the Liontrust Japan Equity Fund on 8 November 2021
following regulatory and shareholder approval.
Performance
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 an Amber for
comparable market rates,
we have concluded that
the Fund has performed
in line with expectations
for the remaining criteria,
delivering overall value to
investors including through
the investment performance.
Go back to the Summary
of the Assessment of
Value table
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 merged with the Liontrust Japan Equity Fund on 8 November 2021.
The Liontrust Japan Opportunities Fund returned 42.9% over the five years to 31
August 2021, underperforming the TOPIX Index return of 45.4%.*
The Fund’s strategy of hedging the yen into sterling resulted in approximately -7%
in performance terms due mostly to the sharp fall in sterling after the referendum
vote to exit the EU.
From a portfolio positioning perspective, the underperformance of both the Index
and peer group was largely due to its overweight position in the more value
as opposed to growth category sectors, especially industrials and materials,
particularly against competing funds.
This in turn meant that although the Fund performed well across 2016 and
2017, the majority of its holdings were negatively impacted by fears of a USChina trade war that investors assumed would result from ex-President Trump’s
actions in early 2018. This saw growth-style stocks generally perform better
from 2019 onwards, with a second large relative performance boost after the
markets hit their Covid induced low in March 2020, particularly those stocks
deemed to be involved with e-commerce.
The market then back-peddled on profit taking such that over the three months
to August 2021, the value versus growth battle sharply reversed again as a
combination of Covid outbreaks, worldwide transport disruptions, increasing
fuel costs and component/material shortages – particularly of computer chips
and construction supplies – resulted in investors becoming more pessimistic as
to the strength of any global recovery. Traditionally, Japanese stocks are largely
perceived as being a geared play upon global trade/growth prospects with
domestic developments being of little relevance.
The decision to merge the Fund with the Japan Equity Fund was taken to allow
the holders of the former to benefit from being part of a larger fund while still
being able to choose whether to hedge their investment.
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, net of fees, income reinvested.
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