The £114m Lindsell Train investment trust has capped off another challenging year, with the company’s net asset value (NAV) return down 21.3% for the year ending 31 March 2026. Over this same period, the MSCI World has surged some 16%.
This continues a string of poor performance from Nick Train’s global trust, which has ranked as the worst-performing strategy in the IT Global Sector over the past one, three, five and 10 years, according to data from FE fundinfo.
“Our investment performance last year was the most disappointing in the company’s 25-year history,” Train reflected in the trust’s full-year report, published today (9 June). “For that I must apologise to shareholders for the loss of absolute and comparative value they have suffered.”
“We evidently own a collection of out-of-favour shares, which are therefore underperforming, but that does not necessarily mean we own a collection of underperforming companies.”
Train noted that the team have “no intellectual or emotional problems” with making portfolio changes after a period of underperformance to improve returns as demonstrated by new holdings in companies such as Thermo Fisher Scientific, FICO and UMG.
However, the team is reluctant to sell shares that continue to offer compelling investment cases purely due to benchmark underperformance, Train added.
“We don’t believe we hold anything that is fundamentally ‘broken’ as a business,” he said.
“In other words, we do not believe that ripping up the portfolio and starting again is in the best interests of our investors.”
For example, he pointed to businesses such as Diageo which had longer sales squeezes than initially expected, or LSEG and RELX which had performed well for years but had recently been disappointing.
Part of this is because RELX and LSEG are deemed ‘AI losers’, with investors concerned that AI agents will undermine these data companies’ relationships with their clients, he said.
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“We believe these concerns are at the least exaggerated and more likely misplaced.”
Instead, these companies could benefit from the take-up of AI tools or from partnerships with LLMs, some of which is already being reflected in their results, he argued.
Similarly, the trust maintains a stake in Nintendo, which has struggled as demand for AI has raised the price of chips Nintendo uses for its consoles. According to data from Google Finance, the share price has slid roughly 35.9% in the past year.
However, the new hardware and potential for AI chip demand to moderate means share price weakness presents an interesting opportunity, he said.
This batch of “AI losers” represents almost 25% of the portfolio in total, Train admitted, but “if the sceptics are wrong and AI actually enhances the value of services delivered by these companies then your portfolio is well-positioned.”
The other set of “disappointing” holdings have been the consumer brand companies, which represent a combined 21% of the portfolio.
“I know it is ancient history, but we believe we must consider how consumer brand owners have performed over long periods of time, as businesses and share prices,” the manager said.
While these have generally not delivered impressive growth every year, businesses such as Diageo, Unilever and Heineken deliver steady growth and high profit margins over longer periods, he said.
On top of this, they tend to perform well when growth or cyclical areas struggle, making them well-positioned for a period when concerns about global growth are rising, Train argued.
He also noted that it was reassuring that companies in this sector “have not stood still.” Businesses such as AG Barr are using their net cash to acquire new brands to accelerate growth, while Heineken is cutting costs, which may deliver better growth.
“In summary on these brand owners, we own a collection of steadily growing companies, whose shares have performed poorly for several years and where their boards are evidently looking to improve returns and growth rates,” Train said.
“This really should be a combination to generate better share prices.
“We sincerely hope so,” Train concluded.
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