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Liontrust Income plans move to Global Equity Income sector

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Liontrust Asset Management plans to broaden the mandate of its Income fund, in a move which will see the portfolio switch from the IMA UK Equity Income sector to the IMA Global Equity Income peer group.

The £306m Liontrust Income fund, which is managed by Gary West, James Inglis-Jones and Samantha Gleave, will be able to invest globally from 3 July to allow it to benefit from greater diversification of stocks and sectors.

Liontrust says the move will allow the fund, which is managed using the Liontrust Cashflow Solution investment process, to find stocks with better return potential over the medium to long term.

Inglis-Jones says: “It has been our experience that the wider the universe of stocks we can select from, the greater the potential of the investment process to deliver strong returns. Our analysis suggests the Cashflow Solution process applied globally delivers better returns than when it is confined just to the UK market.

“Increasingly, there are relatively few stocks in the UK that satisfy both our cash flow and yield criteria. By investing globally, the fund will benefit from greater diversification of stocks and sectors. We will be able to find higher yielding stocks in almost all industrial sectors and we believe this will enable the fund  to enjoy lower levels of volatility and improve the reliability of generating income from the underlying portfolio.”

The asset manager says that the move will not result in changes to the fund’s expected dividend yield and risk profile, while the portfolio is anticipated to remain at a similar concentration to its current 26 stocks.

Liontrust Income’s cumulative performance to 3 April 2013

Liontrust Income’s cumulative performance to 3 April 2013
 
Fund 4.02% 12.63% 22.14% 40.34% 24.55%
5.43% 13.83% 20.71% 39.41% 31.97%
-1.34% -1.05% 1.18% 0.67% -5.62%
  81 / 99 66 / 98 33 / 98 43 / 89 53 / 75
4 3 2 2 3

Source: FE Analytics

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