Liontrust Assessment of Value Report - Flipbook - Page 102
Liontrust Strategic Bond Fund
The Strategic Bond Fund has been managed by Phil Milburn
and Donald Phillips since launch in 2018 and aims to maximise
its total return over the long term (5 years or more) through a
combination of income and capital growth by investing in
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, and the Fund’s
charges are justified given the
overall value that has been
delivered to investors.
Go back to the Summary
of the Assessment of
Value table
government bond and credit securities globally. The Fund may
invest up to 40% of its net assets in emerging markets. The fund
managers seek to take advantage of market inefficiencies.
Class B
Class M
Direct Retail*
Institutional
Performance
Quality of service
AFM costs – general
Comparable market rates
Economies of scale
Comparable services
Classes of units
*This is the representative share class for Performance and Comparable market rates.
Performance
We have assessed the investment performance of the Fund against its stated
investment objective that is 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 Strategic Bond Fund returned 4.9% over five years to 30 June
2024 versus the IA Sterling Strategic Bond sector average return of 7.5% (the
comparator benchmark)**.
The fund managers have generated a positive return for the Fund since launch.
For the majority of the period, they found the levels of risk needed to target
substantially higher returns to be unacceptable. The fund managers do not
believe in chasing risk for higher returns and actively manage volatility to limit
losses in down markets.
Five years ago, the managers viewed government bond markets as incredibly
expensive so restricted interest rate risk to less than half that of the global bond
market to reduce downside risk. The Fund typically carried between 2.5 and
3.0 years’ duration compared with the investment team’s neutral position of 4.5
years and the Bloomberg Barclays Global Aggregate Index average of more
than 7.25 years.
This document is intended to be for
information purposes only. It is not
marketing material.
**Source: Financial Express, as at 30.06.24, total
return, net of fees, income reinvested.
102 - Liontrust Assessment of Value Report
Following the sharp rise in government bond yields in 2022 – the result of rising
interest rate expectations and, in the UK, a fiscal misstep to the government –
the fund managers found sufficient value to increase duration as high as 8.25
years in October 2023, well above the Fund’s neutral level but retaining a
little headroom below the nine-year maximum, and the Fund has benefited with
sector-average beating performance over the last two years.
The Fund has met its yield targets and produced capital growth since inception.
While the Fund has underperformed versus the sector average over five years,
it has most recently outperformed. The strategic bond sector has a wide range
of funds, including a number with more aggressive risk appetites than this Fund.
