fund

Rated

This is one of our rated funds. They’re the ones our experts believe will do well for investors over the longer term. Top of the class!

LF Lindsell Train UK Equity

UK equity fund with a concentrated portfolio and a long-term approach to adding value.

  • 347.76p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 505.09p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.60%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.64%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 1.90%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 25 January 2022, fund commentary last updated 25 October 2021

The fund seeks to deliver capital and income growth and generate a return in excess of the FTSE All-Share Index. It aims to do this by investing at least 70% of its assets in “exceptional” UK companies and holding them for many years. Some assets may also be invested in UK-listed global companies. Well-known manager Nick Train focuses on durable, cash-generative companies he believes have been wrongly valued by the market. He prefers branded goods companies and those with enduring intellectual property. The portfolio is concentrated and includes Guinness brewer Diageo, Cadbury chocolate owner Mondelez and football club Glasgow Celtic. He runs a quality-focused, buy and hold, bottom-up investment strategy, taking little account of the economic environment.

Fund summary

Sector UK All Companies
Structure OEIC
Launched July, 2006
Size £6,078m
Yield 1.90%
Charging basis 50% Income 50% Capital
Dividends paid 31 Jan, 30 Sep

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.60%
Ongoing charges figure 0.64%

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Investment process

The UK Equity Fund has an investible universe of around 50 companies. A company must have a particular set of characteristics to be considered for the fund - these include heritage, predictable earnings through pricing power and/or intellectual property, low capital intensity and sustainably high returns on capital. Train finds most of his investments in a select group of industry categories – consumer branded goods and internet/media/software - as people will never tire of being entertaied or informed. Other strong categories include financials and pharmaceuticals, but he avoids heavy, old industry and particularly cyclical sectors. Train values his candidate investments using a variety of approaches, the most important being a discounted cash flow calculation. He will only look to sell a holding if there is a ‘significant breach’ of its valuation target or when the investment premise is no longer valid. This is because he believes that owning great companies for the long haul makes sense and that transaction costs are a tax on his clients’ money. The result is a concentrated portfolio with the number of stocks, most valued over £1billion, unlikely to exceed 35. Its top 10 holdings make up around 75% of its asset allocation.

Manager Nick Train is highly experienced having led the fund since it was launched in 2006. He founded London-based boutique Lindsell Train in 2000 alongside Michael Lindsell, who is portfolio manager on its Japanese Equity fund and joint manager, with Train, on its Global Equity fund. The UK Equity fund benefits from having a strong and clear investment philosophy – inspired by legendary investor Warren Buffett – of buying great companies and holding them forever. Train looks for those rare companies which are “likely to be profitably in business in 20 years’ time”. He believes that by fully researching these companies using his criteria it offers relatively low risk for investors. It is a very patient approach which Train sticks to, resisting the temptation to trade or ‘just do something’. The fund may lack the wider diversification of the Global Equity portfolio but over the long-term performance has been very strong relative to the benchmark.

Manager research

Average monthly relative returns

  • 17/18 0.00%
  • 18/19 0.00%
  • 19/20 0.00%
  • 20/21 0.00%
  • 21/22 0.00%

Bestinvest MRI

  • 3 years 0.00%
  • 5 years 0.00%
  • Career 0.05%
  • 3 years 0.00%
  • 5 years 0.00%
  • Career 83.40%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Nick Train

Train graduated from Oxford University with a degree in Modern History in 1980. He began his investment career at GT in 1981 and began managing funds in 1985, taking over GT Income. Having headed the Pan-European equity team on its formation and risen to Investment Director, he left in July 1998 soon after Invesco's acquisition of GT, moving to M&G. He became their head of global equities in 1999 but left in April 2000 to form Lindsell Train Asset Management with Mike Lindsell.

Track record

Nick Train has 13.3 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.05%. During the worst period of relative performance (from November 1987 - October 1992) there was a decline of 33% relative to the index. The worst absolute loss has been 25%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 83%.

Periods of worst performance

Absolute -25.00% (September 1987 - November 1987)
Relative -33.00% (November 1987 - October 1992)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

Allocation

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Top 10 holdings

Data accurate as at 30 November 2021

9.99% Relx Nv
9.95% Diageo
8.93% London Stock Exchange Group Plc
7.9% Schroders Ord
7.72% Burberry Group
7.6% Unilever Plc
6.85% Mondelez Intl Inc
6.27% Sage Group Plc
6.02% Remy Cointreau
5.79% Heineken Hldg Nv
Source: Trustnet

Sector breakdown

Beverages 25.00%
Financial Services 24.00%
Consumer Goods 16.00%
Media 14.00%
Food Producers 7.00%
Software 6.00%
Support Services 5.00%
Travel 2.00%
Money Market 2.00%

Portfolio

The portfolio will consist of between 20-30 stocks and is likely to have a turnover of between 10-20% on a 5-10 year horizon.

Key Investor Information - Income

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Key Investor Information - Accumulation

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