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LIONTRUST MONTHLY INCOME BOND B GROSS

LIONTRUST MONTHLY INCOME BOND B GROSS - Overview

Overview of LIONTRUST MONTHLY INCOME BOND B GROSS

The fund aims to produce an attractive total return profile and monthly income yield via a core portfolio of predominantly sterling investment grade corporate bonds that meet Liontrust’s environmental and social criteria.The fund can also invest in government bonds, non-sterling investment grade corporate bonds, sub-investment grade bonds, and the management team will actively manage interest rate and other portfolio risks via derivatives.

  • Standard Initial Charge 0.00%
  • Initial charge via Bestinvest 0.00%

Fund summary

Sector £ Corporate Bond
Structure OEIC
Launched November, 2010
Size £533m
Yield 4.4%
Charging basis Income
Dividends paid Last day of each month

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.50%
Ongoing charges figure 0.62%

Risks

Before investing make sure you have understood the risks relevant to the fund by reviewing our Risk Warnings section. Further information on the risks are contained in the fund's Key Investor Information Document, which we make available to you before you make a decision to invest, alternatively it is available on request.

Bestinvest view

We believe that this fund offers an attractive income and risk profile. This is a high conviction approach to credit investing, which provides the experienced management team much more flexibility than most of their peer group to actively manage the fund. Portfolio construction incorporates both bottom-up issuer selection and top-down macro positioning, with the bottom-up criteria including Liontrust's sustainability matrix, which scores companies based on the quality of their management and the sustainability of their products/services.

Portfolio

Allocation Proportion(%)
Equity 0
High yield bonds 4
Quality bonds 85
Property 0
Commodities 0
Hedge 0
Fund cash 11
Allocation Proportion(%)
UK 0
Europe 0
North America 0
Japan 0
Pacific 0
Emerging Markets 0
Allocation Proportion(%)
Large Caps 0
Mid Caps 0
Small Caps 0

View all performance data for this fund

Investment process

The investment process has two key stages; identifying superior bonds; constructing resilient portfolios and controlling risk. The process is a combination of top down (interest rate and credit beta) and bottom up (sector, credit quality, subordination). Top down - quarterly strategy meetings determine long-term positioning. Weekly meetings are designed to implement and review positioning. Daily meetings to review market data & news. The key decision-marker in this regard is head of the desk, Stuart Steven, and this work features strongly in the asset allocation, interest rate positioning and credit rating exposure they seek when “identifying superior bonds”. The bottom up process starts at idea generation (value screen, new issues) from a universe of 500 issuers. The fund managers then combine fundamental credit analysis (company’s ability to pay debt/ default risk, management team track record etc) with in-depth analysis of issuer specific factors, including ESG and macro-economic analysis. The process incorporates Liontrust's established sustainability matrix, which scores companies based on the quality of its management (1-5, 5 being worst) and the sustainability of its products/services (A-E, E being worst). In this fund issuers must score D3 or higher to be considered for portfolio inclusion but it has a weighted average score of B2. Individual bonds are then analysed alongside asymmetric risks, before the team seek to value the bond on both an absolute and relative basis. Portfolio construction reflects stock selection, the managers’ long-term views of markets, and hedging strategies will be used, as appropriate, to reduce downside risk (interest rate positioning, cross-market & curve positions, volatility). From the available buy recommendations identified in stage 1, the team select the best combination of 50 to 100 bonds for inclusion in a focused portfolio that is constructed to safeguard against sustained downside risk.

Live feed

Bid price(inc) 100.49p
Accum units 177.22p
Fund commentary 12/11/19
Fund data updated on 30/07/21

Asset allocation

Allocation Proportion(%)
Equity 0
High yield bonds 4
Quality bonds 85
Property 0
Commodities 0
Hedge 0
Fund cash 11

Equity Geographic

Allocation Proportion(%)
UK 0
Europe 0
North America 0
Japan 0
Pacific 0
Emerging Markets 0

Equity Capitalisation

Allocation Propor
tion(%)
Large Caps 0
Mid Caps 0
Small Caps 0

Top 10 holdings

As at: 31/07/2020
4.6348%Hm Treasury United Kingdom Dmo 8% Gilt 2021
3.2128%Cooperatieve Cent Rffisen Ba/Nl 4.625% Bds 23/05/29 Gbp100000
3.1922%Standard Chartered 5.125% Dtd Subord Nts 06/06/34 Gbp100000
2.7608%Orange Sa 8.125% Bds 20/11/28 Gbp1000
2.725%Verizon Communications Inc
2.6606%Hsbc Hldgs 7% Subord Nts 07/04/38 Gbp50000
2.6224%Natwest Group Plc Fxd To Fxd Rt Rst Nts 14/08/30 Gbp T2
2.5548%Hbos Capital Funding 6.85% Perp Bds Usd1000
2.5422%British Telecommunications 9.875% Nts 15/12/30 Usd1000
2.522%Vodafone Group 5.90% Eur Med Trm Nts 26/11/32 Gbp(Var)
Source: Trustnet

Sector breakdown

Banks 24%
Insurance 18%
Telecommunications 16%
Utilities 15%
Real Estate 6%
Financial Services 5%
Government Bonds 5%
Mortgage & Secured Bonds 3%
Money Market 3%
Property 2%

Portfolio details

62 issuers currently. They quote an average credit rating of A, but this is BBB when you strip out the derivatives.

Constraints

Minimum 80% AAA-BBB. Max financials 50%. Max high yield 15%. Max exposure to CoCo/ AT1 Bonds 7%. Max 20% government bonds, but unlikely to ever be over 10%. No Index Linked, unrated bonds or physical overseas bonds, but will trade UK, US, EU bond futures.
The portfolio usually has very little commonality with the benchmark and so performance can be expected to differ markedly on occasions.

Average monthly relative returns Bestinvest MRI
16/17 17/18 18/19 19/20 20/21   3 years 5 years Career 3 years 5 years Career
0.47% -0.08% -0.16% -0.22% 0.28%   -0.04% 0.06% -0.09% 51.20% 82.60% 35.60%
Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Stuart Steven/ Aitken Ross/ Kenny Watson

Manager. Stuart Steven is a co-fund manager of the Liontrust Monthly Income Bond Fund, having joined Alliance Trust Investments in December 2009 before it was acquired by Liontrust. Steven joined Britannic Asset Management in 1994 and became Head of Corporate Bonds with responsibility for managing investment grade portfolios for retail and institutional funds. In 2000 he joined Legal & General as Director, Corporate Bonds where, until 2006, he managed a team of credit specialists managing multi-currency assets. He joined Scottish Widows Investment Partnership in 2008 as Investment Director, managing a number of funds, including investment grade and & absolute return funds. Aitken Ross was promoted to Co-Fund Manager of the Liontrust Monthly Income Bond Fund in March 2014. Ross joined the Alliance Trust graduate programme in 2010 after graduating from Dundee University with a First in Accountancy and Finance and subsequently completing an MA in International Financial Analysis at Newcastle University. He is also a CFA charterholder Kenny Watson was appointed a Co-Fund Manager of the Liontrust Monthly Income Bond Fund in April 2015. He joined Alliance Trust in 2013 from Ignis Asset Management where he worked for 15 years. Watson started his career at KPMG, after qualifying as a chartered accountant, before joining Murray Johnstone as a trainee fund manager in UK equities in 1994. He has a BA in Accounting & Economics from the University of Strathclyde, is a chartered accountant and is an Associate of the UK Society of Investment Professionals.

Track record

Stuart Steven/ Aitken Ross/ Kenny Watson has 8.5 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.09%. During the worst period of relative performance (from January 2013 - August 2016) there was a decline of 13% relative to the index. The worst absolute loss has been 10%.

Periods of worst performance
Absolute -10% (January 2020 - March 2020)
Relative -13% (January 2013 - August 2016)

Other funds managed

Sector record since January 2013 (8 yrs)




About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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