Liontrust MA Blended and Passive explainer - Flipbook - Page 2
• Hymans Robertson is working with Liontrust to develop models
for the broadest range of investable asset classes and has the
expertise to help combine these asset classes in constructing SAAs
to help meet the suitability requirements of investors.
• Hymans Robertson has created a bespoke model for an
“alternative investments” asset class used as part of our SAA
through a combination of listed and unlisted infrastructure vehicles,
global and UK Real-Estate Investment Trusts (REITs), commodities,
index linked gilts and cash. This will replace the current use of UK
Property within the SAA and enables larger and more diversified
allocations to alternative investments in lower risk funds.
• Defaqto is a well-known risk profiler among financial advisers and
has been operating for over 25 years, employing more than 60
analysts spending 400 hours a day monitoring the market.
• Defaqto analyses over 18,000 funds including fund performance,
risk-adjusted return ratios and costs.
In appointing Hymans Robertson and Defaqto, there will be no
material changes to the risk characteristics of the Liontrust MA
Passive and Blended funds as specified in the prospectus such as
liquidity, concentration, market, counterparty or volatility risk.
There are no changes to the investment objectives and Liontrust will
continue to manage each fund in line with its risk profile. The funds’
risk profiles will now be measured and overseen by Defaqto, with
an associated Defaqto risk profile. The funds will continue to be
mapped to a range of other widely used third-party risk profiling
providers, including EV.
Change of names
Liontrust is changing the name of the Liontrust MA Passive fund
range to Liontrust MA Dynamic Passive on 5 April 2023. They are
making this change because Liontrust believes it better reflects how
the fund range is managed.
The Multi-Asset investment team actively manages the Liontrust
MA Passive range, including through the ability to select different
passive investments from across the market and change them when
appropriate, as well as alter the TAA on a quarterly basis to reflect
the fund managers’ changing views on the relative value of asset
classes and the economic and investment markets’ environment.
This flexibility results in amended weightings of and changes in the
selection of passive investments within the portfolios including asset
classes and geographical weightings.
While the underlying holdings are passive securities and vehicles,
the dynamic management of the allocations between them in the
funds has led Liontrust to change the name of the range to Liontrust
MA Dynamic Passive.
Liontrust is also changing the name of the Liontrust MA Passive
Dynamic Fund to the Liontrust MA Dynamic Passive Adventurous
Fund. This better reflects the fact that the Fund has the highest
risk profile within the range. It also avoids repetition of the word
“Dynamic” in the Fund name.
Current Name
New Name
Liontrust MA Passive
Prudent Fund
Liontrust MA Dynamic Prudent Fund
Liontrust MA Passive
Reserve Fund
Liontrust MA Dynamic Passive Reserve Fund
Liontrust MA Passive
Moderate Fund
Liontrust MA Dynamic Passive
Moderate Fund
Liontrust MA Passive
Intermediate Fund
Liontrust MA Dynamic Passive
Intermediate Fund
Liontrust MA Passive
Progressive Fund
Liontrust MA Dynamic Passive
Progressive Fund
Liontrust MA Passive
Growth Fund
Liontrust MA Dynamic Passive Growth Fund
Liontrust MA Passive
Dynamic Fund
Liontrust MA Dynamic Passive
Adventurous Fund
Interest to dividend distribution changes
The funds in the two ranges distribute income as dividend payments
with the exception of the Liontrust MA Blended Reserve Fund
which distributes it as interest payments. To make these interest
payments, the Liontrust MA Blended Reserve Fund is required to
hold a minimum of 60% of its assets in qualifying interest paying
(or equivalent) investments (the “60% requirement” and “qualifying
investments”) at all times.
Liontrust is proposing to remove the 60% requirement for the Liontrust
MA Blended Reserve Fund and change the way in which the fund
pays distributions from interest payments to dividends, which means
that from 1 July 2023, the Fund will distribute income as dividends
rather than interest. This change is designed to provide greater
flexibility for the Fund to meet its target risk profile while seeking to
maximise returns. The risk profile of the Fund is not expected to change
materially as a consequence of removing the 60% requirement.
Liontrust appointed a leading accountancy firm to evaluate and
review the potential implications for ISA, individual and corporate
investors of the transition from interest to dividend distributions. This
review entailed the modelling of the tax impact of the removal of
the 60% requirement along with changes to the level of ‘qualifying
investments’ held within the Fund.
This modelling was undertaken with reference to the 31 December
2020 corporation tax computation and financial statements of the
Fund. The analysis isolated the tax impacts and did not review
the effect on investor returns of wider changes to the Fund’s
investments. The review assessed the difference in post-tax returns to
investors as a percentage of the Fund’s values as a result of making
this change. Based upon the modelling undertaken, Liontrust is of the
view that the effect of these changes is not expected to be significant.
The analysis undertaken by the accountancy firm and the information
set out in this document does not constitute individual tax advice; if
you have any questions about these changes, please contact your
financial adviser.
