Train praises ‘reassuring’ holdings despite LTIT’s October decline

Portfolio manager Nick Train (pictured) has praised the performance of several Lindsell Train Investment Trust (LTIT) holdings in the face of an overall 2.6% net asset value (NAV) drop over October.

The decline compared unfavourably to the MSCI World Index benchmark, which recorded a 3.9% increase in total returns across the month.

Last month, portfolio manager Michael Lindsell said that the trust’s performance had been “hobbled” by the fall in value of Lindsell Train Limited, which makes up 41.5% of its NAV.

This continued in October as the holding was named as one of the three largest negative contributors to performance across the month, alongside Diageo and Paypal.

LTIT top 10 holdings (as of 31 October 2022)

The top three positive contributors to the fund’s performance in October were Mondelez, Relx, and LF Lindsell Train North American Equity Fund.

Train singled out Mondelez, owner of Oreo and Cadbury, as a company that “most investors would want a proportion of their portfolio invested in” to deliver “inflation protection and steady real growth” through times of instability.

He added: “What is so critical through this period of economic and macroeconomic uncertainty is to ensure our clients’ savings are invested in durable businesses that have the potential to protect against monetary inflation and benefit from secular growth trends too.”

Nintendo, London Stock Exchange Group (LSEG) and Heineken all recorded “reassuring” results, Train said, with the last of these posting a 20% increase in revenues for the third quarter of 2022.

For its part, LSEG reported a 7% hike in underlying revenues in its latest quarterly results. Train said: “I was asked by an investment banker what we thought of these LSE results. My response was that they were encouraging and that it bewildered me that a company of this scale [£40bn] and potential was not a cornerstone holding in every UK pension fund.”