The Global Fixed Income process | What we offer | Liontrust Asset Management PLC
Multi-Asset team

The Global Fixed Income process

Investment process

The process uses the same framework to garner a thorough understanding of the economic environment and for bottom up stock analysis: fundamentals, valuations and technicals (FVT). These three factors are examined regardless of whether the managers are considering a duration position or an investment in a speculative grade rated company. Consistency of decision making is impossible without using the same inputs.

The three main drivers for fixed income portfolios are rates, allocation and selection. The three categories have numerous alpha sources underlying them, and the managers optimise portfolio positioning by adjusting these sources of risk and return. They can be used to target alpha, beta or risk management depending on a fund’s mandate.

In judging whether a company is an attractive long-term investment, the managers analyse the following factors, which they call our PRISM:

  • Protections – operational and contractual, such as structure and covenants
  • Risks – credit, business and market
  • Interest cover, leverage and other key ratios
  • Sustainability, of cash flows and environmental, social and governance (ESG) factors
  • Motivations of management and shareholders

 

Process document

Further information can be found in the Liontrust Global Fixed Income Process document.

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The Global Fixed Income team
David Roberts, Phil Milburn & Donald Phillips
The Global Fixed Income team

David Roberts, Phil Milburn and Donald Phillips, who all joined Liontrust in early 2018, have more than 60 years of joint investment experience. Before joining Liontrust, David and Phil worked together at Kames Capital for 14 years, where David was Head of the Fixed income team and Phil was Head of Investment Strategy.

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The wary canary and the LIBOR OIS spread

Phil Milburn

The US 3 month LIBOR OIS spread has widened since the start of the year, prompting questions about whether this is a sign of stress in the market for the wholesale liability financing of US banks. Phil Milburn analyses what has driven the widening and what this means for investors. Read more

Trump trumps Italy?

David Roberts

David Roberts considers how Donald Trump’s trade war threats and a troubled Italian election could affect bond markets.


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Key Risks

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 Global Fixed Income team involves foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. The value of fixed income securities will fall if the issuer is unable to repay its debt or has its credit rating reduced. Generally, the higher the perceived credit risk of the issuer, the higher the rate of interest. Bond markets may be subject to reduced liquidity. The Funds may invest in emerging markets/soft currencies and in financial derivative instruments, both of which may have the effect of increasing volatility.

Disclaimer

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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