The launch of a North American fund and net inflows from US investors has helped Lindsell Train Limited, Nick Train’s and Michael Lindsell’s investment boutique, increase 24.5% in value since the end of March.
The £21.2bn asset manager was the largest contributor to performance in the Lindsell Train Investment Trust in the six month period to 30 September. The investment trust returned shareholders 13% over the period while its net asset value increased 21%, compared to 23.6% gains in the MSCI World Index. The investment trust is benchmarked against gilts, which returned 2% over the period.
Lindsell Train Investment Trust chairman Julian Cazalet said the strong performance from Lindsell Train Limited, which is a 47.3% holding in the portfolio, reflected growth in assets under management.
“Market movements were the main impetus behind growing FUM, although net asset flows were also positive,” Cazalet said.
Flows had predominantly come from US investors with assets in the Delaware-based Global Equity LLC surging from $384m at the start of the reporting period to over $1bn by the end. Lindsell Train’s Japan strategy grew 30%.
Cazalet said: “LTL’s long term performance remains competitive even though over the last six months other equity investors – particularly those with high weightings in technology companies – will have done better.”
See also: Lindsell Train on track to take fees hit as trust lags gilt benchmark
Lindsell Train North America fund rises 14%
The reporting period also covered the launch of the Lindsell Train North American equities fund, which the Lindsell Train Investment Trust helped seed with a £12.5m investment, funded by exits from Ebay and the Lindsell Train Japan fund. Its value has risen 14% since inception in April.
Cazalet described two key motivations for the fund launch, which is not being promoted externally until a “meaningful” track record has been achieved.
“First, there has been a desire to launch a fund to capture the investment opportunity from US listed companies that already make up more than 40% of the global universe of companies that LTL researches.
“And second, by focusing LTL’s research resources on these US companies, it was felt that any increased knowledge and understanding of them would percolate through to LTL’s other strategies – either directly in the case of Global and UK (where 20% of the portfolio can be invested in non-UK listed companies, some of which are currently US listed) or indirectly in the case of Japan.”
The fund holds 24 companies of which 15 are new holdings for Lindsell Train Limited.
“In addition, the initiative will help to burnish the portfolio management skills of two key members of the investment team and could ease the route to succession when LTL’s founders decide to withdraw from the business – not that there is any hint of that happening any time soon!”
While Cazalet focused on the performance of Lindsell Train Limited in his chairman’s report, Nick Train used his investment manager’s report to detail the performance of the remaining portfolio constituents.
See also: Nick Train marvels at Amazon days after revealing US equities fund launch
How LTIT’s quoted portfolio has performed
Seven out of 12 of the portfolio’s quoted companies have shown share price gains over the last six months.
“The gainers are led by PayPal, which has more than doubled, with double-digit gains too for Finsbury Growth, LSE, Mondelez, Nintendo and Unilever. Meanwhile, Diageo was up, but just 2.5%,” said Train.
“Of the five fallers the worst were Laurent Perrier, down a bit more than 5% and Heineken, down 4%. There were more modest declines from AG Barr, Pearson and RELX – to round off this sorry set.”
The investment trust finished the reporting period with a premium of 3.9% but that has since risen to 21.94% today, according to Hargreaves Lansdown data.
See also: Nick Train rues not holding big tech but is not about to change his mind
