Liontrust Assessment of Value Report - Flipbook - Page 86
Liontrust Japan Equity 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.
Performance
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 expectations, 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.
The Liontrust Japan Equity Fund returned 50.1% over five years to 31 August
2021, outperforming the TOPIX Index return of 45.4% but behind the IA Japan
sector average of 53.9% (both comparator benchmarks).*
This performance largely reflected the underlying portfolio’s overweight position
in the more ‘value’ as opposed to ‘growth’ category sectors, especially industrials
and materials, particularly against our competing funds.
This meant that although the Fund performed well across 2016 and 2017, the
majority of its holdings were negatively impacted by fears of a US-China 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 so 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
about 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 Fund has benefited
strongly from these more recent market shifts.
We have concluded that the Fund has met clients’ expectations, providing
strong capital growth and outperforming the index over the last 1, 3 and 5
years, however, we note that the fund has underperformed the sector over 5
years mainly due to its more value bias, but has performed strongly over the last
year as the style has come into favour.
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.
86 - Liontrust Assessment of Value Report