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Samantha Gleave, Cashflow Solution: A world of opportunities

We have made a number of changes to the portfolio of stocks held in the Liontrust Income Fund, not only to reflect the results of our annual review of company reports and accounts, but also following the expansion of the geographical remit of the Fund to now allow us to select stocks from a global universe of companies. This expansion should enable us to achieve greater diversification of stocks and sectors, and therefore improve the quality of returns from our portfolio of holdings. In recent weeks, we have been able to increase our weighting in existing overseas holdings such as Total, the French integrated oil & gas company, as well as adding a selection of new international holdings including US-based RR Donnelley, which we provide further details of below.

We are not intending to affect a dramatic shift in the Fund’s geographic exposure. Prior to July’s expansion of the geographical remit we adhered to the 20% limit on non-UK equities demanded by the IMA (Investment Management Association) categorisation of the UK Equity Income sector. Following the removal of this geographic restriction, which saw the Fund move to the IMA Global Equity Income sector, we anticipate a gradual increase in international exposure of the Fund beyond this level. The region of the world today that contains the greatest proportion of strongly cash generative high yielding companies, however, is western Europe. Our expectation therefore is that the portfolio will continue to have a significant exposure to western Europe until such time as more compelling relative valuations occur in other parts of the globe.


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