Liontrust Sustainable Future Monthly Income Bond
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
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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.
Fund Managers
Jack Wilis, Co-Manager
Jack Willis joined Liontrust in April 2017 with the acquisition of Alliance Trust Investments. He began his career on the Alliance Trust Management training programme in September 2014 after earning a First Class Honours in Mathematics with Finance and an MSc in Finance and Investment with Distinction, both from the University of Leeds. Initially a credit analyst, Jack is now Co-manager of the Liontrust Monthly Income Bond Fund, Sustainable Future Corporate Bond Fund, and GF Sustainable Future European Corporate Bond Fund. He is also a CFA Charterholder.
Aitken Ross, Co-Manager
Aitken Ross joined Liontrust in April 2017 with the acquisition of Alliance Trust Investments. He began his career on the Alliance Trust Management training programme in September 2010 after graduating with First Class Honours in Accountancy and Finance from Dundee University and completing an MA in International Financial Analysis with Distinction at Newcastle University. Following a successful tenure as an analyst, Aitken is now Co-manager of the Liontrust Monthly Income Bond Fund, Sustainable Future Corporate Bond Fund, and GF Sustainable Future European Corporate Bond Fund. He is a CFA Charterholder.
Kenny Watson, Co-Manager
Kenny Watson joined Liontrust in April 2017 after over three years with Alliance Trust Investments. He co-manages the Liontrust Monthly Income Bond, Sustainable Future Corporate Bond Fund, and GF Sustainable Future European Corporate Bond Fund. Previously, Kenny spent 15 years at Ignis Asset Management, where he specialized in sub-investment grade bonds and managed portfolios including the High Income Bond Fund. He began his career at KPMG as a chartered accountant before moving to Murray Johnstone in 1994 as a trainee fund manager in UK equities. Kenny holds a BA in Accounting & Economics from the University of Strathclyde and is a chartered accountant.
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.
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.
Quote from the Fund Manager
“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 WilisCo-Manager
Jack WilisInvestment 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.
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.
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.
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