View more on these topics

Liontrust roars in with new fund

Liontrust has unveiled the Liontrust distribution fund, its first new fund for five years.

This unit trust combines a lower-risk portfolio of gilts with an actively managed equity income portfolio. Up to 40 per cent of the fund will be invested in UK stocks selected for their high income characteristics and reasonable growth potential. This part of the portfolio will aim to achieve a yield of around 5 per cent and be benchmarked against FTSE All Stocks 5-15 year index. The fund manager is Jeremy Langmead, manager of the Liontrust first income fund.

Between 60 per cent and 75 per cent will go into an index-tracking gilt portfolio managed by State Street Global Advisors. This is benchmarked against the Citigroup UK Government Bond index.

Combining a portfolio of UK equities with a gilt portfolio means that investors get diversity within one fund and the lower-risk nature of gilts keeps the higher risks of equities in check to some degree.

The difference between this fund and the array of other available distribution funds is that the fixed-income element is focused on gilts. At the start of the year gilts did not look a good prospect, especially with uncertainty about interest rate rises which would reduce the value of gilts. But now, with many commentators suggesting interest rates have peaked, the outlook for gilts appears brighter.

Data from the UK Debt Management Office, which issues gilts on behalf of the Treasury, shows that monthly average yields for short, medium and long-dated gilts rose during the first four months of 2004 and have been falling since May, indicating that prices are rising.

However, a lack exposure to corporate bonds will mean this fund misses out on any gains to be had in that part of the bond market.


Review of 2004: Mortgages

The base rate rises this summer started the slowdown in transaction levels but the industry is almost unanimous in saying that there will be no crash.

Review of 2004: Offshore markets

For the first six months of 2004, the offshore market was dominated by allegations of misselling against Towry Law International.

Review of 2004: Fund supermarkets

Fund supermarkets had another strong year but had to come to terms with the fact that they are maybe not quite as important a distribution channel as some of them might think.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm