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Lindsell Train faces worst performance in 20 years

Nick Train not ‘complacent’ about Lindsell Train’s future as investment trust faces worst performance in 20 years

  • Lindsell Train is facing its worst performance in its 20-year history 
  • The trust highlighted its lack of exposure to software and platform technology  
  • Fund manager Nick Train says he is not complacent about the trust’s future

Top fund manager Nick Train has said he is not complacent about the future of the Lindsell Train Investment Trust, admitting it could be facing its worst performance in 20 years.

In the investment trust’s half-year results published today, Train said protecting the long-term value of savings, after the effects of inflation and tax, ‘is no trivial challenge’.

‘I will not make flippant or complacent predictions about prospects for Lindsell Train Limited, as we experience arguably the worst period of relative investment performance in our 20-year history,’ he said.

Nick Train’s fund Lindsell Train has suffered a period of underperformance since the start of the pandemic  

Lindsell Train, which was launched in 2001 by Train and Michael Lindsell, has suffered a period of underperformance since the start of the pandemic.

The company’s net asset value rose 5.9 per cent to £1,207.36 by the end of September 2021, but this lagged its benchmark MSCI World Index, which rose 10.2 per cent.

It has also been one of the worst performers in its sector – the AIC Global – over the past six months and investors have pulled £743million from the trust in this period.

Julian Cazalet, the trust’s chairman, said this slump in performance was largely due to a lack of exposure to software and platform technology, and capital intensive manufacturing.

He said he ‘would not expect LTL to invest in the latter as it would be contrary to its stated investment approach’, but Train may see opportunities in the former at a ‘favourable entry point’.

In its existing portfolio, some of its best performers – including the London Stock Exchange, Unilever and Heineken – have all fallen in value by 20 per cent or more from recent peak prices.

However Train thinks this is a largely pandemic-induced blip and concerns ‘should unwind over time’. He concedes the consumer segment of the portfolio, which includes Irn-Bru-maker AG Barr and Laurent Perrier, are likely to face more change.


AIC sector: Global

Launched: 2001

Total assets: £235m  

NAV: 1,177.05 

Premium: 9.6%  

5-year dividend growth (per annum): 42.18%

Dividend yield: 3.88%   

(Source: Association of Investment Companies)  

‘It is possible the internet is encouraging greater propensity for experimentation by consumers… We know it is important to ensure we are invested in companies whose brands remain relevant and aspirational for consumers.’

‘We admit Unilever has suffered a disappointing period as a share price and as a business it has questions to answer about its profitability through a period of rising inflation expectations,’ said Train.

Unilever has long been a favourite for fund managers like Train who value the consumer goods giant’s reliable dividends. Its share price pushed higher in the 2020 selloff but has fallen 11 per cent since the start of the year, not helped by rising inflation pushing up costs.

‘[Co-manager] Michael Lindsell and I have been around long enough to know that Unilever has always looked boring to trading orinteted investors and that its investment qualities, boring though they may be, are not to be frivolously dismissed.’

‘We assure you, we remain disciplined and serious in our efforts to invest in assets with the potential of protecting or enhancing the real, after-tax purchasing power of your savings.’