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The Macro-Thematic process

Investment philosophy

At the core of the investment philosophy lies the belief that Macro-Thematic analysis – the identification and interpretation of major economic, political, social and cultural developments affecting the UK and the rest of the world – offers scope to add long-term investment value. A Macro-Theme is defined as an undiscounted, structural change in the process of realisation, and the related passage to theme-maturity, is the macro-trend. Macro-Thematic analysis tends to identify long duration investment opportunities that persist beyond market cycles.

Investment process

The fund managers believe a “top-down” approach is the most appropriate in identifying episodes of change, their drivers and the resultant investment opportunities. In their view, this objective cannot be attained with a “bottom-up” or company specific approach.

Macro-Thematic investment opportunities exist because investors are bad at discounting the kind of change that defines Macro-Themes. Investors suffer from behavioural biases including herding, forecasting bias and cognitive bias. This leads to a gap between investment theory – based on the idea that investors are rational in aggregate and that asset prices efficiently discount all available information – and practice.

Importantly, a Macro-Theme may be expressed in both positive and negative terms. The fund managers have courage in their convictions: positive themes are supported by large absolute portfolio weightings whereas negative themes may result in the complete absence from the portfolio of certain stockmarket sectors.

The Macro-Thematic investment process consists of four stages:

  1. 1

    Theme discovery

  2. 2

    Identification of theme-assisted and theme-impaired companies

  3. 3

    Bottom-up analysis of prospective investments

  4. 4

    Portfolio construction and management

Process document

Further information can be found in the Liontrust Macro-Thematic Process document.

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The Macro-Thematic team
The Macro-Thematic team
 

Stephen Bailey (left) and Jamie Clark (right) have over 45 years of combined investment experience and moved to Liontrust in 2012. Stephen started his career in the mid-1980s and joined Walker Crips in 1987 as investment director. Jamie joined Walker Crips in 2003 and prior to that was a Junior Proprietary Trader at First New York Securities.

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Ratings

Morningstar Sustainability rated 4
Liontrust Macro UK Growth Fund
Morningstar Sustainability Rating: 4

Latest fund updates

The Macro-Thematic team

Read the latest fund updates from the Macro-Thematic team.

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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 Macro Thematic team involves foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. The Fund’s expenses are charged to capital. This has the effect of increasing dividends while constraining capital appreciation. The performance of the Liontrust GF Macro Equity Income Fund may differ from the performance of the Liontrust Macro Equity Income Fund and is likely to be lower than its corresponding Master Fund due to additional fees and expenses.

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.

 

© 2018 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.  Past performance is no guarantee of future results.

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