Liontrust SF Corporate Bond added to the Wealth Shortlist

Liontrust Sustainable Future Corporate Bond was added to the Wealth Shortlist of funds chosen by our analysts for their long-term performance potential on 23 February 2022.

The fund aims to deliver a combination of income and capital growth over the long term by investing mostly in sterling-denominated, investment grade corporate bonds. These are bonds issued by companies deemed to be financially secure, with the ability to pay off their debts in the form of interest to investors.

The fund is part of Liontrust’s Sustainable Future range of funds. These funds aim to help create a cleaner, safer and healthier society for the future and generate attractive returns for investors.

This fund excludes areas some may find unethical, such as tobacco, coal and weapons and invests mostly in companies making a positive difference to the environment or society. Using exclusions means the fund will perform differently to peers at times, so could offer some diversification to a traditional fixed income portfolio. It could also help to diversify a portfolio focused on other assets, such as company shares.

The fund’s managed by a team of four: Stuart Steven, Kenny Watson, Aitken Ross and Jack Willis. Steven leads the team as Head of Sustainable Future Fixed Income. He’s managed fixed income funds for over two decades, at a variety of companies including Britannic Asset Management, Legal & General and Scottish Widows. He joined Alliance Trust Investments in 2009 and began managing the SF Corporate Bond fund in August 2012. Alliance Trust Investments was acquired by Liontrust in April 2017.

Co-manager Watson has 17 years’ experience managing fixed income funds, and Ross and Willis have researched and analysed fixed income investments since 2012 and 2016 respectively. Like Steven, the trio joined Liontrust when it acquired Alliance Trust.

The four managers, and three other colleagues, form the small but focused Sustainable Future Fixed Income team. We like that the team invests their own money in the fund, and their incentives are aligned with those of investors.

The team can also draw on an Independent Advisory Committee, which is an external panel of sustainability experts who provide feedback on the process, highlight areas for improvement and act as an additional level of oversight.

We’ve carried out a comprehensive analysis of the universe of responsible fixed income funds and have conviction in the Liontrust SF Corporate Bond fund. Investors should note though that there are also other corporate bond funds on the Wealth Shortlist without strict exclusion criteria that may offer superior performance potential.

We like that individual managers have full responsibility for the investments under their coverage, undertaking both the sustainability analysis, and the more traditional corporate bond analysis. The same manager also spearheads engagement that takes place with the companies they cover – it’s not farmed out to a separate Stewardship team. It’s clear that the team regards sustainability as a key part of the investment process, and it’s considered with the same level of importance as the more traditional financial analysis.

Following detailed analysis of the team’s track record and several meetings with them, our conviction has grown, and we recently added the fund to the Wealth Shortlist. We admire Steven’s experience, and that of the wider Sustainable Future Fixed Income team and believe they can deliver good long-term results for investors.

READ THE LIONTRUST SF CORPORATE BOND FUND RESEARCH UPDATE

Past performance is not a guide to the future. Source: Lipper IM to 31/01/2022

MORE ABOUT Liontrust SF Corporate Bond, INCLUDING CHARGES

Liontrust SF Corporate Bond Key Investor Information