Lindsell Train Global Equity B

Investment Process

A company must have a particular set of characteristics to be considered for the Global Equity Fund. These include heritage, with the average age of its holdings being a remarkable 123 years, and predictable earnings through pricing power and/or intellectual property. The managers also look for companies with low capital intensity and sustainably high returns on capital. The team find most of their investments in a select group of industry categories – consumer branded goods and internet/media/software as people will never tire of being entertained or informed. Other strong categories include financials and pharmaceuticals, but the team avoids heavy, old industry and particularly cyclical sectors. The managers value their target firms using a variety of approaches, the most important being a discounted cash flow calculation. They will only look to sell a holding if there is a ‘significant breach’ of the valuation target or when the investment premise is no longer valid. This is because the team believes that owning great companies for the long haul makes sense and that transaction costs are a tax on clients’ money. The portfolio typically holds between 20 and 35 stocks and its biggest sector exposure is to consumer staples. Its holdings are typically found in the UK, the US, Japan and Europe.