Liontrust Managed Portfolio Service For Professional Advisers only Q2 2015
Liontrust MPS Liontrust MPS offers a broad range of eight active growth and six income portfolios available through Standard Life Liontrust MPS offers one of the largest ranges of DT risk-targeted portfolios available through Standard Life Liontrust is one of only four DFMs on Standard Life that is a member of the G12 threesixty Services has reviewed and verified that the operation of Liontrust MPS meets regulatory standards 2
Who are we? 3
About Liontrust Our vision is to be one of the leading fund management companies in the UK and internationally, renowned for consistently adding value to clients investment portfolios. Launched in 1995, Liontrust takes pride in having a distinct culture and approach to fund management. We specialise in those asset classes where we have particular expertise Our fund managers are independent thinkers and have the courage of their convictions in making investment decisions Our fund managers have the freedom to manage their portfolios according to their own investment processes and market views without being distracted by the day-to-day aspects of running a business We have distinct and rigorous investment processes that ensure the way we manage money is predictable and repeatable 4
Meet our experienced fund management team JOHN HUSSELBEE FUND MANAGER John Husselbee is one of the most highly regarded practitioners of multi-manager and multi-asset investing in the UK retail market with 23 years of experience of running portfolios. He was previously the Director of Multi-Manager Investment at Henderson Global Investors, where he was responsible for portfolio construction and fund selection for a range of portfolios totalling over 650 million. Prior to Hendersons, John was responsible for the launch and ongoing management of the portfolio management service at Rothschild Asset Management. In 2005, John founded North Investment Partners and joined Liontrust in 2013 as Head of Multi- Manager Multi-Asset. John sits on the selection committee for the Investment Week Fund Manager of the Year Awards. PAUL KIM FUND MANAGER Paul Kim has managed discretionary portfolios and multi-manager funds for more than 30 years. He was instrumental in setting up Investment Manager Selection Ltd (IMS) and the subsequent growth of the business. In 2008, IMS was bought by BNP Paribas and re-named Fundquest, with Paul being responsible for the management of IMS funds and client funds, including for Aviva Investors. In March 2011, Paul was appointed Head of Fund Selection and Multi-Manager at Liverpool Victoria Asset Management (LVAM). Paul has also managed discretionary portfolios and services at Capel Cure Myers, Sun Life Portfolio Counselling Services (AXA Sun Life), Christie Group Investment Management and Spencer Thornton Investment Management Services. Paul joined Liontrust in 2013. Over 50 years of combined experience 5
Reasons to Buy 6
Reasons to Buy Broad range: The service offers a broad range of 14 risk-targeted portfolios, comprising eight active growth and six income portfolios, available through Standard Life Access: Fund manager access Tactical flexibility: We use tactical asset allocation (TAA) to supplement the longterm benefits of strategic asset allocation (SAA) with the flexibility to take advantage of valuation opportunities in the short term Experience: John Husselbee and Paul Kim of Liontrust Investment Solutions Limited have a combined experience of more than 50 years in managing multi-manager multi-asset portfolios Knowledge: This experience enables John and Paul to be able to identify and separate investment innovations from fads Insight: John and Paul evaluate the motivations of fund managers and identify any changes in their contentment and commitment 7
Reasons to Buy continued Rigorous process: Designed to deliver the outcome expected by investors and maximum returns for each model portfolio within the pre-determined volatility range Risk Management: The team has a strong focus on risk management to ensure the portfolios meet their risk targets and are being managed in line with their objectives Service and communications: We are a client focused business and provide regular and relevant communications, fund manager commentaries and factsheets about your clients investments Value for money: We aim to keep costs to a minimum to ensure that fees and charges are competitive Strong parent company: Liontrust Investment Solutions Limited is a wholly owned subsidiary of Liontrust Asset Management Plc, which is listed on the London Stock Exchange and is a specialist, process-driven fund management business 8
Annualised Returns (%) MPS Risk/Reward since launch 45.0 40.0 5 6 7 8 35.0 4 4 30.0 2 3 3 25.0 2 20.0 1 15.0 10.0 5.0 0.0 0.0 2.0 4.0 6.0 8.0 1 0.0 1 2.0 Annualised Volatility (%) Growth Portfolios Income Portfolios Cash (LIBOR GBP 3 Months) IA Mixed Investment 0-35% IA Mixed Investment 20-60% IA Mixed Investment 40-85% IA Flexible Investment IA Global Source: Liontrust/Lipper. Sterling returns net income reinvested 30 th June 2011 to 31 st March 2015 for Growth 1 to Growth 8 and Income 2 to Income 4. The launch date for Income 1 is 1 st October 2014 therefore figures are not available for the period covered by this chart. 9
Investment Process The process is designed to achieve two main objectives: to deliver the outcome expected by investors dependent on their appetite for risk to achieve maximum returns for each model portfolio within the pre-determined volatility range There are four key stages to our investment process with risk management central to each of them: strategic asset allocation tactical asset allocation fund selection portfolio construction 10
Portfolio management: a round the clock job 11
Investment Process: Fund Research Our objective is to select the right funds at the right time by evaluating the consistency of returns in absolute and relative terms and identifying key performance drivers. We use both quantitative and qualitative analysis to identify predictable and repeatable processes. Quantitative Analysis: returns method returns based style analysis portfolio method Qualitative Analysis: we favour managers with experience, knowledge, process and the right incentive/motivation to succeed one-to-one meetings, seminars, conference calls and conferences company, process, team and support systems focused questionnaires, factsheets and supplemental marketing collateral 12
Investment Process: Strategic Asset Allocation The strategic asset allocation (SAA) by broad asset class for each of the model portfolios are shown below: Strategic Asset Allocation 1 2 3 4 5 6 7 8 Equities 13.3% 19.9% 26.5% 48.1% 64.3% 80.5% 89.3% 98.0% Bonds 30.0% 45.0% 60.0% 39.6% 24.3% 9.0% 4.5% 0.0% Alternatives 1.8% 2.6% 3.5% 5.1% 6.3% 7.5% 3.8% 0.0% Cash 55.0% 32.5% 10.0% 7.2% 5.1% 3.0% 2.5% 2.0% Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% The SAA is essentially the default asset allocation should we have no views on the relative attractiveness of different asset classes. The long-term SAA is reviewed and updated on an annual basis to reflect the evolution of the historical returns, volatility and correlation data set. Source: Liontrust as at January 2015. 13
Investment Process: Inputs into Tactical Asset Allocation decision During the Tactical Asset Allocation stage of our investment process we seek to add value by investing in a broad range of asset classes that can be further drilled down by: Geography Style tilt Capitalisation Credit Currency 14
Quantitative style analysis Source: Lipper, sterling returns 10 years to 31 st March 2015. Past performance is not a guide to future performance. 15
Which portfolio is right for your clients? We offer a range of portfolios to suit your clients different attitudes to risk, investment objectives and time horizons. Each of the portfolios in the Liontrust Managed Portfolio Service aim to maximise returns for a given risk profile. Risk Graded Investment Strategies 1 2 3 4 5 6 7 8 Growth Portfolios Expected Volatility % (5 years) 2-6% 4-8% 6-10% 7-13% 9-15% 11-17% 13-19% 14-22% Expected Volatility % (10 years) 3-5% 5-7% 7-9% 9-11% 11-13% 13-15% 15-17% 17-19% Income Portfolios Expected Volatility % (5 years) 2-6% 4-8% 6-10% 7-13% 9-15% 11-17% Expected Volatility % (10 years) 3-5% 5-7% 7-9% 9-11% 11-13% 13-15% Returns and drawdown of simulated historic performance of portfolios Risk Graded Investment Strategies 1 2 3 4 5 6 7 8 Average Annual Real Return (%) 2.10 2.82 3.54 4.53 5.09 6.03 7.36 8.69 Maximum Annual Real Return (%) 8.07 10.80 13.53 18.82 24.08 30.24 35.96 41.68 Minimum Annual Real Return (%) -4.08-6.70-9.32-13.76-16.45-20.43-23.89-27.76 Maximum Drawdown (%) -4.46-7.16-9.90-14.83-16.53-22.28-26.06-30.10 Returns data based on 15 years (2000-2014) of monthly inflation adjusted performance of simulated portfolios holding the strategic asset allocations for each risk profile in representative asset indices with annual rebalancing and no transaction, management or other fees. Annual returns based on calendar years, Maximum Drawdown based on consecutive monthly real declines. Source: Liontrust. Expected volatility is expressed as the annualised standard deviation of monthly returns. Past performance is not a guide to future performance. All investment return figures quoted are expressed in real (inflation-adjusted) terms. The Bank of England s current CPI target is 2%. Based on monthly simulated returns data of the portfolios. 16
Summary 17
Summary: Key selling points Our service offers 14 DT risk-profiled portfolios, eight active growth and six income portfolios Liontrust is one of only four DFMs on Standard Life that is a member of the G12 Fund manager access John and Paul have a combined experience of more than 50 years managing multi-manager multi-asset portfolios threesixty Services reviewed and verified Costs are kept to a minimum to ensure that fees and charges are competitive. The fee to invest in the Liontrst MPS through Standard Life is 0.36% a year, including VAT, excluding underlying fund charges 18
Strictly private and confidential information Important notice Liontrust Investment Solutions Limited (LISO), which is 100% owned by Liontrust Asset Management Plc, is authorised and regulated by the Financial Conduct Authority (No. 495713). This presentation contains information intended only for the person to whom it is addressed or presented, and is intended for evaluation purposes only, with no licence to use the content or materials within. In receiving this presentation, the recipient acknowledges and agrees that: i) in the event the recipient does not wish to pursue this matter, this presentation will be returned as soon as possible; ii) the recipient will not copy, fax, reproduce, divulge or distribute this confidential presentation, in whole or in part, without the express written consent of LISO; iii) all of the information herein will be treated as confidential material with no less care than that afforded to the addressee s own confidential material of the most sensitive nature; iv) information herein may constitute material non-public information, disclosure of which may be prohibited by law, and the legal responsibility for its use is borne solely by the recipient. This presentation in no way constitutes an offer to sell, nor a solicitation to purchase securities in any company or investment product. Nothing contained within this document constitutes investment, legal, tax or any other advice. It should not be relied upon when making an investment or other decision. Any performance shown represents model portfolios which are periodically restructured and/or rebalanced. Although the model portfolios are applied to a client s account, the actual returns may vary from the model returns shown. In addition, portfolio performance is quoted net of cost of investment but gross of fees i.e. the OCF of the underlying portfolio investments is taken into account but the Investment Management Fee is not so client returns will differ from the returns shown. Returns do not take account of platform, product provider or Adviser fees. Any figures shown have not been externally audited. All figures in this document are sourced from Lipper and are total return in sterling. The value of investments and any income may go down as well as up and will depend on the fluctuations of investments and financial markets outside of the control of Liontrust Investment Solutions Limited. As a result a client may not get back the amount originally invested. Past performance is not indicative of future performance and any reference to a security is not a recommendation to buy or sell that security. Issued by Liontrust Investment Solutions Limited, April 2015. Registered office: 2 Savoy Court, London, WC2R 0EZ. 19