Lindsell Train Investment Trust (LTIT) has enjoyed a pick-up in performance after Nick Train’s eponymous boutique saw its funds on the rebound as investors began to question the speed of the economic recovery from the Covid crisis.
The trust, which is now pegged against the MSCI World Index in sterling, saw its net asset value (NAV) rise by 6.4% in June, while shares were up 5.6% on a total return basis. Its new benchmark returned 4.4% by comparison.
Writing in the June factsheet, Train (pictured) said LTIT’s turnaround was down to improving fortunes for its largest holding, Lindsell Train Limited.
Train and Michael Lindsell’s boutique, which accounted for 46% of NAV at the end of June, was responsible for the lion’s share of LTIT’s 29% boost to NAV in the year to 31 March 2020.
While its four strategies, including the Lindsell Train UK Equity and Global Equity funds, stumbled in Q1 due to their “negligible exposure” to cyclical, recovery plays, in the second quarter this situation reversed with all funds outperforming their respective benchmarks.
“This can be ascribed to investors’ growing caution about the world getting back to ‘normal’ anytime soon, if ever, and a corresponding shift of investor preference back to secular growth companies,” Train noted.
“This has been accompanied by a rally in government bond prices, as fears about imminent, runaway inflation recede.”
Lindsell Train North American outshines more mature strategies
However, Train noted all four funds are still lagging their respective benchmarks year-to-date.
Lindsell Train Japanese Equity has delivered the worst relative performance of the lot, still some 9% behind the TOPIX Tokyo Stock Exchange over the first six months of 2021.
Meanwhile, the Lindsell Train North American fund has seen the strongest relative performance in 2021. By the end of Q2, the newest fund in Lindsell Train’s stable was down just 1% versus the S&P 500.
Train said: “As shareholders know, the North American fund is a sizeable holding in the Lindsell Train Investment Trust and Mike and I are delighted at the strong absolute return it has delivered to your portfolio since its launch in April 2020 and sincerely hope that James, Madeline and the rest of the team will soon be able to demonstrate strong relative returns as well.
“Mike and I are investors in the fund, but that is the limit of our involvement – so we watch its progress with keen, avuncular interest, as should all Lindsell Train Investment Trust shareholders.”
See also: US investors buoy Lindsell Train Limited as flows into UK-based funds shrivel
