Liontrust Multi-Asset Quarter in Review - Flipbook - Page 8
• While passive exposures have modestly increased, we also
remain selective in our active managers and, again, have taken
this rebalance as an opportunity to make changes.
European Dynamic is backed by a larger team and has a more
flexible strategy, with a high-quality backbone but capacity to
rotate into value when the opportunity exists.
• In the Income portfolios, we are replacing Redwheel Enhanced
Income with JOHCM UK Dynamic. While the deep-value RWC
fund has performed well in the recent rotation, this comes after
several years of weaker returns. We have concluded that the team’s
concentrated strategy, investing in deeply discounted companies,
carries too much risk of either mistakes or falling into value traps
in declining industries. In contrast, JOHCM UK Dynamic is more
diversified, with strict sector limits around portfolio construction,
investing in around 50 companies versus RWC’s 25 to 30.
While the sector framework and identification of a catalyst for
change result in a ‘value-lite’ style, this mindset leads to a more
diversified portfolio, which is arguably more open to opportunities
in recovering and/or undervalued companies.
• Our move to AB American Growth is another example of
rationalisation as the AXA Framlington fund has performed well.
Again, both look to uncover persistent growth opportunities but
AB American Growth tends to be a little more concentrated and
adopts a purer growth style, which we believe is viable given the
US market composition – although it should be blended with a
more core or value-biased proposition.
• In the Growth portfolios, we are replacing Man GLG Continental
Europe with BlackRock European Dynamic and AXA Framlington
US Growth with AB American Growth.
• These two European funds are similar so this move is more a
case of rationalisation, bringing our Multi-Asset Portfolios and
Funds closer together, as opposed to concerns with the strategy.
In essence, both pursue a high-quality approach but BlackRock
8 - Liontrust Multi-Asset Funds and Portfolios Quarterly Report: Q2 2022