Liontrust Asia Income Fund

February 2018 portfolio changes

  • Sold – Ratchaburi Electricity. The holding was sold in order to fund a switch into Land & Houses, a position we initiated last month. Land & Houses is another beneficiary of domestic consumption growth in Thailand, which we believe has a more attractive earnings growth outlook and dividend yield (c.6% v c.4% for Ratchaburi).  Although Ratchaburi is planning power capacity additions, higher operating costs resulting from longer-than-expected maintenance shutdowns as well as higher finance costs have eroded the earnings growth profile to low single digits. In addition, uncertainty surrounding the renewal of expiring Power Purchase Agreements is weighing on the stock.
  • Sold – Fletcher Building. Construction losses on some complex projects have led Fletcher Building to downgrade its earnings guidance on a few occasions in the past 12 months, which has reduced our confidence in its management team. There is a risk to the dividends as well if the loss estimates increase further.
  • Sold – RHT Health Trust. We exited the position due to increasing risks surrounding its takeover by parent company Fortis Healthcare.  RHT has recently been facing delays in payments and increase in outstanding receivables from Fortis. In addition, Fortis promotors are involved in legal cases and potential liabilities which may lead to them losing control of Fortis. Any delay or cancellation of the proposed takeover will be negative for RHT.

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. The issue of units/shares in Liontrust Funds may be subject to an initial charge, which will have an impact on the realisable value of the investment, particularly in the short term. Investments should always be considered as long term.

Investment in Funds managed by the Asia 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 Fund invests primarily in Asian companies, which may be less liquid than companies in more developed markets.


This content 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. Examples of stocks are provided for general information only to demonstrate our investment philosophy.  It contains information and analysis that is believed to be accurate at the time of publication, but is subject to change without notice. Whilst care has been taken in compiling the content of this document, no representation or warranty, express or implied, is made by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified. It should not be copied, faxed, reproduced, divulged or distributed, in whole or in part, without the express written consent of Liontrust. 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.

Monday, March 5, 2018, 1:10 PM