Lindsell Train spent around $90m (£67.7m) on sports and entertainment stocks during the coronavirus outbreak despite the hit to broadcasting and ticketing revenue.
The £21.7bn fund house added to stakes in Manchester United, Disney and World Wrestling Entertainment during Q2, according to the Financial Times. That’s despite the pandemic hitting the broadcasting and ticketing revenue of Manchester United, Disney closing its resorts during lockdown and WWE scrapping its financial guidance for 2020.
The Lindsell Train North American fund also initiated positions in Nike and New York Knicks parent Madison Square Garden Sports. Lindsell Train announced in May that it was launching the fund for James Bullock.
See also: Nick Train marvels at Amazon days after revealing US equities fund launch
In the latest monthly update for the Lindsell Train Global Equity fund, Nick Train highlighted the divergent performance of companies offering “virtual” services compared to those offering “real” experiences.
In July, Paypal, Hargreaves Lansdown and the London Stock Exchange were key contributors to the £7.6bn fund’s performance, while Italian football club Juventus dropped 3% despite winning its ninth consecutive championship.
“When will people feel confident enough to return to previous social behaviours, like attending football matches?” Train asked.
“We look at the share price of Electronic Arts, the US video-game maker, up 32% in 2020, in part because sales of its sports games and associated virtual tournaments have boomed during lockdown.
“But will fans permanently transfer their allegiance and their dollars to the virtual teams (or the players who compete in these tournaments)? Or is it necessary for Juventus and, say, WWE, to continue to deliver well-attended, real-world sporting spectacles to keep up the interest in the digital products? The answers to those two questions are: no and yes respectively – we are sure.”
Train reckoned human beings both crave “real” activities and experiences. “Clubbing, Disney theme parks, business deals signed at exhibitions, luxury shopping and, yes, attending live football matches will all come again. Because it is human nature.”
See also: Lindsell Train trust lags benchmark after mixed bag of Q2 results
