Liontrust Assessment of Value Report - Flipbook - Page 84
Liontrust India Fund
The Fund is managed by Ewan Thompson and aims to generate
capital growth over the long term (5 years or more). The Fund
invests at least 80% in shares of Indian companies. These are
companies which, at the time of purchase, are incorporated,
domiciled, listed or conduct significant business in India.
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
Amber for performance, we
understand why and have
explained the reasons for
this, we continue to keep
the fund under close review.
The Fund has performed in
line with expectations for
the remaining criteria and
is delivering overall value to
investors.
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.
Although the Fund has underperformed the benchmark over three and five
years, we have taken into account the fact the current fund manager has been
responsible for the Fund for less than five years.
The Liontrust India Fund returned 45.7% over five years to 31 August 2021,
versus the MSCI India Index (comparator benchmark) return of 74.4%. Following
a Fund Manager change on 11 December 2018, the Fund returned 45.6% to
31 August 2021 versus the MSCI India Index return of 51.0%.*
The Liontrust India Fund underperformed over the period primarily due to
two poor years of performance in calendar years 2018 and 2019, during
which the management of the Fund changed twice. Over these two years, the
Fund’s performance suffered due to its exposure to medium-sized companies,
which underperformed the wider market during a de-risking phase sparked by
concerns over asset quality in the financial sector, which in turn led to lower credit
availability to domestically facing industrial and manufacturing companies. The
Fund’s holdings in the industrial sector contributed negatively over this period as
economic growth faltered, and, in addition, the Fund’s underweight position in
defensive sectors such as consumer staples – which outperformed heavily during
this risk-off phase – was costly.
The Fund’s outlook has been generally directed towards the long-term opportunity
within the under-researched mid-cap space and also domestically focused
companies that the manager believes will be the ultimate beneficiaries of the
exciting growth potential of the Indian economy.
In response to both the Fund’s poor relative performance in 2018 and 2019 and
the changed underlying conditions within the Indian economy, the decision was
taken to exit stocks that were perceived as more vulnerable to the credit problems
affecting the economy at the time – however, given the attractive long-term outlook
for both the market and economy, a number of our long-term holdings were kept
due to the attractive risk-reward profile apparent after such a significant derating.
This focus has been rewarded significantly over the last two years as the Fund has
outperformed due to its exposure to both the post-Covid recovery in the Indian
economy and also the positive resolution of the asset-quality issues affecting sentiment
towards the wider market and in particular stocks tied into the now-apparent economic
revival. The investment cycle that was envisaged has now materialised, having been
delayed firstly by the credit problems mentioned above and then more recently due to
the global pandemic. We continue to monitor the Fund but have noted the improving
performance and believe the Fund is appropriately managed going forward.
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.
84 - Liontrust Assessment of Value Report