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Liontrust Global Income Fund

March 2021 review
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.

The Fund returned 5.4%* in sterling terms in March. The MSCI ACWI High Dividend Yield Index comparator benchmark returned 6.6% and the average return from funds in the IA Global Equity Income sector – also a comparator benchmark – was 5.0%.


Investors continued to anticipate economic acceleration as the global vaccine roll-out was extended despite concerns over the AstraZeneca/Oxford vaccine’s links to rare blood clots. In addition, President Biden’s US$1.9 trillion stimulus plan was passed through Congress and is likely to add further fuel to the economic expansion.


In February, this stimulus injection stoked inflation concerns and sparked a sell-off in the sovereign bond market. In March, both US Treasury Secretary Janet Yellen and US Federal Reserve Chair Jerome Powell issued statements indicating that they had no concerns about the US economy overheating. Powell said that higher prices this year are likely to be transitory, while the market has been orderly adjusting to a brighter economic outlook. Yellen added that inflation risks remain subdued despite the stimulus, but the plan could help the US reach full employment in 2022.


In this environment, value stocks continued to outperform: the MSCI World Value Index rose 6.5% in sterling terms compared to the MSCI World Growth Index’s 1.8% return. All sectors in the MSCI World ended higher with utilities the biggest riser (+9.0%) followed by consumer staples (+7.8%) and industrials (+7.2%).


For the second month in a row, Bank of Ireland (+23%) was among the Fund’s best performers. The company’s 2020 results showed the impact of the pandemic on trading, causing it to swing to an underlying pre-tax loss of €374m. The bank recorded a €1.1bn net credit impairment charge, a sharp rise compared to the €215m charge it booked in 2019, mostly related to its non-performing loans. However, this impairment was at the lower end of company guidance and Bank of Ireland said that – notwithstanding any further deterioration – the majority of the risk from Covid-19 is now captured and impairments in 2021 should be materially lower.


It was more positive for Danish jeweller Pandora (+11%), which said organic growth and total sell-out growth were 12% and 7% respectively in February as it continued to reopen stores. A quarter of its stores remained closed at month end, but Pandora said it is pleased with the performance so far in 2021. It maintained its guidance for organic growth of over 8% and EBIT (earnings before interest and taxes) margin of over 21%.


Auto maker Stellantis (+17%) – the combined group resulting from the Fiat Chrysler and Peugeot merger – said it expects to improve margins in its first year as a company. Adjusted operating margins in 2021 are expected to be 5.5% - 7.5%, up from 5.3% in 2020 as management focuses on achieving merger synergies.


Shares in German fertilizer company K+S (-10%) fell after it disappointed the market with its 2021 EBITDA guidance of €440m-€540m. This forecast does, however, represent a significant increase from the 2020 level of €267m as K+S highlighted very good demand for potash fertilizers and a further recovery in prices. In 2020, the group reported a €1.8bn adjusted loss, mainly attributable to a €1.9bn impairment loss on assets in its European operating unit. As a result, K+S did not declare a dividend.

Positive contributors to performance included:

Bank of Ireland (+22%), Navient Group (+18%) and Stellantis (+17%).


Negative contributors to performance included:

Yuexiu Transport Infrastructure (-11%), K+S (-10%) and Rio Tinto (-5.9%).


The Fund has an income target benchmark of the yield on the MSCI World Index. The Fund’s most recent income distribution was announced on 31 December 2020. Its distributions over the 12 months to 31 December 2020 – expressed relative to the Fund’s price on 31 December 2019 – give a 12-month yield of 3.7%. The MSCI World Index yield on the same basis was 2.0%.


Discrete years' performance** (%), to previous quarter-end:







Liontrust Global Income I Inc






MSCI ACWI High Dividend Yield Index






IA Global Equity Income













*Source: Financial Express, as at 31.03.21, total return (net of fees and income reinvested), bid-to-bid, institutional class. Non fund-related return data sourced from Bloomberg.


**Source: Financial Express, as at 31.03.21, total return (net of fees and income reinvested), bid-to-bid, primary class.

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Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. Investment in Funds managed by the Cashflow Solution team involves foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. The Liontrust European Growth Fund holds a concentrated portfolio of stocks, if the price of one of these stocks should move significantly, this may have a notable effect on the value of the respective portfolio. The Liontrust Global Income Fund's expenses are charged to capital. This has the effect of increasing dividends while constraining capital appreciation. 


The information and opinions provided should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Always research your own investments and (if you are not a professional or a financial adviser) consult suitability with a regulated financial adviser before investing.

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