Liontrust to merge Global Income and European funds

Liontrust is planning to merge two Global Income and European funds pending shareholder approval on 17 June, Investment Week has learned.

The mergers bring together former Neptune funds with their Liontrust counterparts, following the acquisition of Neptune in October 2019.

As part of the changes the £146.5m Global Income fund will merge with the £103.9 Global Dividend fund.

Liontrust hires MGIM's Klempster and removes VAT on MPS

Liontrust's global equity team began managing the Global Income fund in the beginning of May this year.  The global equity team is run by Robin Geffen and James Dowey. The named managers on the Global Dividend and Global Income funds are Dowey and Storm Uru.

"As the objectives of the two funds are similar, Liontrust believes it would be appropriate to merge the two strategies," a spokesperson from the business said. 

"Investors will benefit from the strong track record of the Liontrust Global Dividend fund and from the economies of scale afforded by the combined fund which will have assets under management of approximately £250m." 

The Global Dividend fund, which was previously a Neptune fund, has outperformed its sector, the Global Equity Income Retail sector, in the past five years, while the Global Income fund has underperformed. The sector had an average return of 66.6%, while the dividend fund returned 98.5% and the income fund returned 62.9%, according to figures from FE fundinfo.  

Fund launches and closures: 2020 as it happened

Similarly, the £83.6m European Opportunities fund will merge with the £212m European Growth fund.

The Liontrust cashflow solutions team took on management of the European Opportunities fund in early May. The cashflow solutions team is run by James Inglis-Jones and Samantha Gleave, who also run the two European funds.

The European Opportunities fund, which was previously a Neptune fund, has underperformed its sector, Europe excluding UK retail in the past five years while the European Growth fund has outperformed. The sector returned an average of 74.4% in five years, while the Opportunities fund returned 68.5% and the growth fund returned 103.5%, according to data from FE fundinfo.

"Liontrust considers these actions to be in the best interests of investors," the spokesperson said.

If the EGM vote is successful the mergers will take effect from 25 June.