The Lindsell Train Global Equity Fund has been one of my strongest performers in 2019, and I think that will continue throughout the new decade and beyond.
The fund has certainly benefited from its investments in Disney, which has seen a stellar second half of the year with the launch of the streaming service Disney+.
Nick Train is a strong hand
Every good fund needs a strong managing hand at the tiller – one who sticks to sound investing principles and doesn’t makes waves. For Fundsmith, it’s Terry Smith. For Lindsell Train, it’s Nick Train. Probably one of the best things about Nick’s investing strategy is that he relies on low turnover in and out of the Lindsell Train Global Equity Fund.
This approach makes sense to me. if you believe in the long-term health of a business, it should continue to deliver for many, many years. It would take a fairly catastrophic event to see one of the stable multinational businesses drop out of Nick’s top-10 list in the fund.
However, this normally quiet investment manager hit the headlines at the end of December because two of his popular funds – the £9.5 billion LF Lindsell Train UK Equity Fund and the Finsbury Growth & Income investment Trust – lost their gold star status with investment services company Morningstar over liquidity concerns.
I think this shows that the market is desperate to avoid another Neil Woodford-style scandal, where a fund manager running rampant and largely unchecked by his investors was allowed to collect millions of pounds a month in fees even while his funds were vastly underperforming.
I don’t think Nick Train is Neil Woodford. Far from it.
Top 10
I like the mix of UK, US, and Japanese firms in the Lindsell Train Global Equity Fund. Companies in these three countries make up 87% of the fund.
Unilever is the largest holding, followed by drinks giant Diageo, then Heineken. The London Stock Exchange Group is fourth and Disney the fifth largest.
Rounding out the top 10 are games manufacturer Nintendo, internet payment services provider Paypal, FTSE 100 scientific publisher Relx, NASDAQ-listed Quickbooks owner Intuit, and Japanese consumer chemicals company Kao Corporation.
Diversification
Thankfully, all of the UK and US companies listed deal internationally. So while 7% of the fund is in Dutch companies and 3% in Italian firms, there is a relatively small exposure to European stocks, which I like.
The fund has a stake of around 9% in Unilever, which has seen an unusual share price dip in the latter half of 2019. This was based on a trading update that showed sales growth was predicted to be at the lower end of forecasts.
I have suggested that if you are a value investor and want a stable FTSE 100 grower, then now is a good point to buy Unilever.
A little of this
In my opinion the Lindsell Train Global Equity Fund has the right mix of international companies and growing businesses with diversification across sectors to guard against a failure in any one area. Its analysts take the time to find the right companies that can remain in the fund for the long term with little churn or turnover. If I had £10,000 on hand then I would put it into this fund.