You are currently using Internet Explorer. This website is optimised for Google Chrome, Mozilla Firefox and Microsoft Edge. You can download Chrome here, Firefox here or Microsoft Edge here.
A concentrated UK equity fund that is biased towards the manager's favoured sectors. He takes a very long-term view of value creation and hence, name turnover is extremely low. Within its sector, the fund features in our 'Growth-Biased' category.
The fund’s KIID Synthetic Risk and Reward Indicator (SRRI) is 6. This is a regulatory measurement that is, where possible, calculated from the volatility of its weekly performance over a five-year period. A score of 6 means the fund’s historic volatility is between 15% to 25%.
Our analysis indicates that the fund’s five-year standard deviation is modestly lower than UK equity indices. To some degree, this is indicative of the potential for the three primary sector exposures of consumer staples, media and financial services to act as offsets to each other at the portfolio level. However, the concentrated nature of the portfolio, at both the stock and sector levels, and the bias towards mid caps, mean that there is potential for periods of higher volatility and we would caution investors to set their expectations accordingly. Different share classes could have differing SRRI scores.
The fund manager, Nick Train, co-founded Lindsell Train in 2000 after almost a year as Head of Global Equities at M&G. He had previously spent 17 years at GT Management, latterly with Michael Lindsell, a Japanese equity specialist and the second co-founder of Lindsell Train. Mr Train is the lead investor on UK mandates, which have included the Finsbury Growth & Income Trust since 2001. The small investment team also includes three deputy fund managers, Madeline Wright, Alexander Windsor-Clive and Ben van Leeuwen. Ms Wright works closely with Mr Train on the UK Equity fund
The fund manager believes that companies with sustainably high returns on capital are scarce and systematically undervalued by equity markets and that he can add value over the long term by building a concentrated portfolio of such companies without seeking to trade around shorter-term earnings fluctuations. He further believes that dividend income is an important component of long-term performance.
The nature of the approach leads to very low portfolio turnover and the manager is comfortable that the idea generation process typically leads to a material underweight in the largest companies in the index. The portfolio is concentrated and new positions are typically initiated at 3% - 6% for mid- to large-cap companies. The dividend yield is usually higher than the market average.
Only a small number of UK companies, in the region of 30-40, meet the manager's stringent criteria for durable, cash generative franchises. These can be beneficiaries of long-term, technology-driven change, which the managers view as particularly powerful. They are identified through the team's experience at company analysis and typically incorporate established business performance over a multi-year period, strong and unique brands, strong cashflows and sustainable dividend yields. In the most exceptional businesses, these characteristics should be self-reinforcing and support long-term business performance without the need for significant ongoing capital investment.
The majority of companies identified fall in the sectors of consumer brands, media and non-bank financial services. They are valued according to long-term discounted cashflow measurements, with the long-term time horizon reflecting the team's confidence in the sustainability of their competitive advantage that is typically not priced by the market. They build a very concentrated portfolio of the most attractive ideas and seek to hold these companies for the long term.
Formal documentation, including the fund prospectus and the KIID, should be sought directly from the asset manager. For ease of reference, a link to the ASSET MANAGER WEBSITE can be found above, as well as a link to the ASSET MANAGER FACTSHEET.
At The Adviser Centre, our primary aim is to support financial professionals in their fund selection and suitability work through independently-minded research, borne of decades of industry experience. Our process is framed by the fundamental concepts of “quality”, “value” and “utility”, through which we answer the key questions of why to invest in a fund, how it is likely to behave and how it can be deployed.
The Adviser Centre team members are some of the most experienced in the fund research industry. We can always look forward to robust and constructive discussions and we have great respect for their views and perspectives, which, given the breadth of their fund and market knowledge, come from an extremely well-informed position.
We have known and worked with the team for several years and we value their experience and the insights they provide to our own investment process. The service differentiates itself by its more focused nature and the information on their factsheets is useful in emphasising a fund’s key mandate, exposure and style biases, helping to explain the risk/return journey that our customers can expect.
© The Adviser Centre | All Rights Reserved. The Adviser Centre is a trading name of Embark Investments Limited and is not authorised to carry out regulated activities. Embark Investments Limited is a company registered in England (No. 03383730) and a wholly owned subsidiary of Embark Group Limited, with its registered office at 33 Old Broad Street, London, EC2N 1HZ. Embark Investments Limited is authorised and regulated by the Financial Conduct Authority (Registration No. 628981). This website is provided by The Adviser Centre and is a service for financial professionals only. Information on this website, including data and information from asset managers and third party sources, is deemed to be correct at the time of publication but The Adviser Centre takes no responsibility for its accuracy. Opinions are stated honestly and with careful consideration but they can change at any time and should not be solely relied upon. Information featured on the website does not constitute financial or investment advice.
Your use of this website is subject to the terms of use set out in the website. By continuing to use our website we will assume that you are happy to receive non-privacy intrusive cookies. Please be aware that if you disable cookies some functionality on the site will not work. Read our cookies policy to find out more about our cookie use and how to disable cookies.
Alternatively, if you are not a financial professional and are seeking financial advice, you may wish to visit unbiased.co.uk to search for a financial adviser.