A fleeting recovery in July has truly given way to a more downbeat second half after Lindsell Train Investment Trust (LTIT) recorded back-to-back NAV and share price drops in August and September.
In the nine months to 30 September 2022, LTIT’s share price dropped 18.8%, while its NAV was down 10.2%. This compares with a -9.5% return by its benchmark, the MSCI World Index, over the same period.
After trading on a premium of 5.9% in July and 3.1% August, the trust swung to a discount of 3.7% in September.
LTIT’s market cap plunged to £198m, the first time this year it has fallen below £200m, representing a drop of 9.6% from the £219m at the end of August and 22.4% below the £255m recorded at the end of December 2021.
Michael Lindsell (pictured), the trust’s portfolio manager, noted that LTIT’s performance had been “hobbled” by the fall in the value of its holding in Lindsell Train Limited (LTL). According to the factsheet, nearly 43% of the company’s holdings were in LTL. He added: “More than two years of disappointing performance across the company’s four equity strategies against a background of rising interest rates and falling markets, with widespread outflows from equity funds, makes for a difficult environment.”
LTL’s funds under management fell from around £23bn at the beginning of the year, to £19bn at the end of September.
On a more positive note, Lindsell highlighted the strong performances of the London Stock Exchange and Nintendo, whose year-to-date share prices are up 11% and 12%, respectively.
By way of conclusion, he added: “Nintendo and the LSE’s recent strength helps to highlight how, at a time when the trust’s core holding in LTL is under pressure and falling as a percentage of the net asset value—from 49% at its peak to 41% today, there are other important assets that have the potential to offset some of this decline.”