Interactive Investor has stuck by Lindsell Train UK Equity on its Super 60 after a review of liquidity in Nick Train’s fund prompted by two research house downgrades.
The D2C platform’s investment committee placed the fund under review in November 2019.
“As a result, and because of the highly concentrated nature of the fund and a recent downgrade by two independent external agencies, we wanted to reassure ourselves that there has been no deterioration in liquidity,” said head of funds research Dzmitry Lipski.
Interactive Investor looked at liquidity, capacity and concentration in the fund, plus spoke to Train “at length”, before concluding it would remain on the Super 60, said Lipski.
“The majority of the holdings are large, liquid companies with diversified revenue streams. In terms of capacity, there is plenty of room for further growth without compromising the mandate.”
Interactive Investor’s conclusion differs from Square Mile and Morningstar.
In November, days before Interactive Investor put Lindsell Train UK Equity under review, Square Mile demoted the fund from the highest possible AAA rating to an A rating.
At Christmastime, Morningstar downgraded the fund from gold to bronze.
No changes to Interactive Investor Super 60 since launch
The continuation of Lindsell Train UK Equity as a Super 60 constituent means the buy list hasn’t had any changes since launch a year ago in contrast to the Wealth 50, which has dropped seven changes since it was unveiled in its revamped form in January 2019.
Lindsell Train UK Equity was one of only two open-ended Super 60 funds that were most popular with Interactive Investor users during the first year of the buy list. The other was Fundsmith Equity.
Unlike Hargreaves Lansdown, which says investment trusts are not liquid enough to handle the Wealth 50, Interactive Investors includes investment trusts on the Super 60.
Interactive Investor head of personal finance Moira O’Neill described the buy list as instrument agnostic and questioned why rivals, like Hargreaves Lansdown, are not.
O’Neill said: “What this data shows is that whilst investment trusts might be the Cinderellas of the investment world, seldom invited onto rated lists and rarely recommended by financial advisers, they are the natural home of self-directing private investors. So, the question of why they are so under-represented on most platform rated lists and model portfolios remains to be answered.”
Investment trusts featured among the best and worst performers in the buy list on an absolute basis over the last year.
The Henderson Smaller Companies Trust was up 46% over the period followed by the TR Property Trust, which rose 41%. But Blackrock Frontiers was among the worst performers during the period gaining 4%.
Man GLG Continental European Growth was the best performing open-ended fund over the period up 31%. But BMO Commercial Property was the worst performer, down 2%, while the Templeton Emerging Markets Smaller Companies fund nudged up just 2% over the period.
Interactive Investor Super 60 most popular investment trusts and funds
- Scottish Mortgage Investment Trust
- Fundsmith Equity
- City of London Investment Trust
- F&C Investment Trust
- TR Property Investment Trust
- Murray Investment Trust
- JPMorgan Emerging Markets Trust
- LF Lindsell Train UK Equity
- Henderson Smaller Companies Investment Trust
- BMO Commercial Property Trust
