Multi-Asset Dynamic Passive Funds | Liontrust Asset Management PLC

About the MA Dynamic Passive Funds

The Liontrust Multi-Asset Dynamic Passive range comprises seven funds that are designed to target the outcome expected by investors in terms of their level of risk, as measured by volatility, and maximise the return for each fund within the appropriate risk band.

While the underlying holdings are passive securities and vehicles, we actively manage the Liontrust MA Dynamic Passive range.

This includes through the ability to select different passive investments from across the market and change them when appropriate, as well as alter the tactical asset allocation on a quarterly basis to reflect our 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.

Therefore, the Liontrust MA Dynamic Passive range differs from other passive offerings by being actively managed while providing broad diversification. Each of the Multi-Asset funds within the range provide diversification across a range of different underlying providers, geographical regions and asset classes.

The higher the risk of the fund within the range, the greater the potential for volatility, positive returns on the upside and losses in down markets.

Clients can stay invested in the service through the accumulation and decumulation phases of their lives as their risk profile changes.

Our MA Dynamic Passive Funds

Factsheet

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Past performance does not predict future returns. You may get back less than you originally invested. Reference to specific securities is not intended as a recommendation to purchase or sell any investment.

Reasons to invest

Experience: One of the most experienced and highly regarded multi-asset multi-manager investment teams in the UK market, headed by John Husselbee
Diversification: Each portfolio provides diversification across a range of different funds, fund managers, geographical regions and asset classes
Long-term flexibility: Investors can switch between the range of funds as their risk profile and objectives change during the accumulation and decumulation phases of their lives
Rigorous process: The investment process is designed to deliver the outcome expected by investors and aims to generate maximum returns for each target risk fund within the pre-determined volatility ranges
Added value: We seek to add value through each of strategic and quarterly asset allocation, fund selection and portfolio construction
Costs: We aim to keep costs to a minimum and are often able to invest in underlying funds on better terms than those commonly available

Our Investment Process

Strategic asset allocation (SAA) The SAA is the primary determinant of suitability and long-term risk and returns for investors. To determine the SAA, historical returns and volatilities of a range of asset classes, as well as their correlations with each other, and other market dynamics are collated and studied. The SAA is updated annually and have a 15-year time horizon.

Tactical asset allocation (TAA) TAA determines the overweight or underweight exposure to asset classes compared to the SAA. Each asset class, sub-asset class and the overall market environment are given a score from 1 to 5. The quants data provide a quantitative perspective on, for example, the relative attractiveness of an equity market both against other markets and against its own history. The scorecard informs the over and underweights that the team expresses through portfolio construction.

Portfolio construction We test the performance and interaction of factors, such as value, growth, quality or size, over the long term and identify a blend that will provide the most effective risk-adjusted exposure. The decision on the use of passive vehicles depends on availability and suitability. The combination of the target manager allocations and TAA weights provides a target holding size for every manager. The team ensures the new targets comply will portfolio rules and restrictions.

Manager selection Managers are subjected to quantitative analysis of current and past positioning. We analyse the drivers of performance, particularly the stylistic exposure of managers. The team considers manager philosophy and process, team structure, business structure and incentivisation, stock selection process, portfolio construction, historical and current positioning. We also ensure selected funds are suitable from an operational and compliance perspective.

Implementation The team implements the process in a manner that treats customers fairly, creates consistency across the fund and portfolio ranges wherever possible, finding an optimal balance between trading and portfolio turnover, and ensuring the implemented holdings reflect the team’s views. Underpinning all of this is the need to remain suitable for investors from a risk and mandate perspective.

As the Fund is targeting the volatility expected by investors, then there will be short-term periods when the Fund may underperform relative to the market and other funds, especially those seeking to generate capital growth without a volatility target. The Fund typically performs well on a relative basis when diversification is rewarded by markets.

Performance of the Liontrust Dynamic Passive fund range

Source: FE Analytics, as at 30.09.24. Since inception data runs 08.03.11 to 30.09.24. Primary share class, total return figures are calculated on a single pricing basis with net income (dividends) reinvested. Performance figures are shown in sterling. Transaction costs are included for the period shown but may differ in the future as these costs cannot be determined with precision in advance.

Past performance does not predict future returns. You may get back less than you originally invested.

Fund insights

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Key literature

Liontrust MA Blended & MA Dynamic Passive SAA Update Liontrust Levels of Diversification - MA Passive Funds

"A key objective in terms of performance is to strive to 'win over the long term by not losing.' We aim to achieve this by seeking to manage risk and limit losses in falling markets to enhance long-term returns in each risk target."

Multi-Asset team

Headed by John Husselbee, who has nearly 40 years of industry experience, the seven-strong Multi-Asset team comprises multi-manager, equity and fixed income specialists. James Klempster (who joined Liontrust in 2021 from Momentum Global Investment Management) is Deputy Head and Head of Equities, Phil Milburn (2018 from Kames Capital) is Head of Rates and Donald Phillips (2018 from Baillie Gifford) is Head of Credit. Anthony Chemla, who joined in April 2023 from atomos where he was lead Portfolio Manager for DFM portfolios and co-Portfolio Manager of the MPS, and Sharmin Rahman, who joined in August 2022 having previously been a Senior Portfolio Manager and Analyst at AXA Investment Managers, are both Investment Managers. Fund Analyst David Salisbury joined in 2022 from 4 Shires Asset Management.

How to invest in Liontrust funds

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