Liontrust Assessment of Value Report - Flipbook - Page 66
Liontrust Macro Equity Income Fund
The manager of the Fund changed from the Macro Thematic
team to the Global Equity team on 2 October 2020. Liontrust is
proposing to merge the Fund with the Liontrust Income Fund, which
will be subject to investor and regulatory approval.
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.
Although the Fund has delivered its income target, over the last five years performance has
suffered as a result of poor positioning around a number of macro events (in particular Brexit
and Covid-19) and a shift to a significant value bias. The Fund has produced a negative
capital return, and significantly underperformed both the benchmark and sector over the last
five years, and so we must conclude that the Fund has not consistently delivered expected
returns to investors.
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
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 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 or unit class they are
currently invested in. The OCF of the Institutional class of this fund is higher than some of its
peers but our assessment has concluded that the pricing of this unit class is appropriate given
the intended investors and terms of the unit class.
66 - 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 was given Red
for the performance criteria,
the managers changed in
October 2020 and we have
proposed to merge the Fund
with the Liontrust Income Fund.
Whilst we have identified
areas for improvement and we
are taking actions to address
these, overall we consider the
Fund is delivering value.