As the name suggests, Liontrust Sustainable Future Monthly Income Bond aims to produce a monthly income with some capital growth. It does this by investing mainly in corporate bonds and some government bonds. Whilst doing this, the fund has the flexibility to move between shorter or longer dated bonds in order to take advantage of changes in interest rates.
Previously called Liontrust Monthly Income Bond
Our opinion
Kenny Watson and Aitken Ross have worked together for a number of years, and moved together to Liontrust from Alliance Trust Investments in 2017 with Jack joining the team as co-manager in March 2022. We like their highly analytical and flexible process. Likewise, the monthly income is another positive, alongside the Liontrust Sustainable Future Monthly Income Bond fund's track record of producing an attractive level of yield.
Company description
Liontrust Asset Management was founded in London in 1995 and prides itself on the freedom it allows its managers, who invest in their own portfolios. Listed on the Stock Exchange since 1999, the company's culture is at the forefront of its values. The firm was awarded the Elite Provider for Equities Rating in 2015, 2016, 2019 and 2021.
Fund manager
Liontrust Sustainable Future Monthly Income Bond is co-managed by Kenny Watson, Aitken Ross and Jack Willis.
Kenny previously worked at Ignis, where he first started investing in UK Smaller companies, before moving to the fixed income team in 2004. Prior to moving into fund management in 1994, he qualified as an accountant at KPMG.
Aitken also has roots in accountancy, with an undergraduate degree in Accounting & Finance from the University of Dundee, and an MA in International Financial Analysis from Newcastle University. Kenny and Aitken moved together to Liontrust in early 2017 from Alliance Trust Investments.
Jack graduated with First Class Honours in Mathematics with Finance and an MSc in Finance and Investment with Distinction from the University of Leeds. Following a successful period as a credit analyst within the team, he became a co-manager on this fund in March 2022.
“We believe the integration of sustainability criteria leads to a higher quality portfolio as sustainable companies have better growth prospects and are more resilient than the market generally gives them credit for.”
Jack WillisFund manager
Investment process
The fund managers target bonds issued by high quality companies, which stand apart from their competitors. They start by analysing the economic backdrop, looking at aspects like interest rates and politics. They then examine the company itself and its ability to meet its debt obligations. They factor in the management team’s track record, business strategy, earnings performance plus the industry’s barriers to entry. On a company level, they assess key environmental, social and governance factors on a matrix scoring system before looking at valuations. The result is a concentrated portfolio of 50-100 holdings across a diverse range of companies.
ESG
ESG - Explicit
ESG is a primary feature of Liontrust’s investment strategy on this fund, with each element being given equal importance when performing stock analysis.The fund managers and analysts produce their own research to fully justify all investment ideas, which includes a credit, sustainability and valuation assessment for all corporate bond positions. Every company held in the portfolio is given a Sustainability Matrix rating to measure two key elements: product sustainability (rated from A to E; assesses the extent to which a company’s core business helps or harms society and/or the environment) and management quality (rated from 1 to 5; assesses whether a company has appropriate structures, policies and practices in place for managing its environmental, social and governance risks and impacts). Liontrust believes that good research, a valuation-driven process and a fully integrated team approach can consistently add value, ensuring a balanced, formal sustainability assessment of each investment. This approach helps identify high quality bond issuers and to achieve long-term, risk adjusted returns.
Risk
Risk controls are embedded at each stage of the investment process. The team hedges currency to remove currency risks and the managers can also use derivatives to manage risks. In addition, the fund is regularly reviewed by an independent performance and risk team.
The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.