A stock market crash can make or break reputations. Terry Smith, who manages Fundsmith Equity, and Nick Train, one half of dynamic fund duo with Michael Lindsell, are possibly the two biggest names in fund management today. They have built their reputations on delivering years of solid growth, from a concentrated portfolio of conviction stocks.
New figures from platform AJ Bell suggest they’ve lived up to their reputations, by putting in a solid performance since the depth of the stock market crash on 23 March. It’s hardly been earth shattering though.
Fundsmith Equity and Lindsell Train Global Equity have climbed by around a quarter in the six months after stock market crash, as equities fought back worldwide.
Smith and Train aren’t all-conquering super heroes though. While Fundsmith Equity grew 30% in the last six months, according to Trustnet, that was only marginally ahead of the 29% growth on its benchmark, the Investment Association Global index. Lindsell Train Global Equity, which has the same benchmark, trailed by growing just 23%.
Stock market crash rebound
Longstanding investors won’t be complaining though. Fundsmith Equity and Lindsell Train Global Equity are the two most popular funds on the AJ Bell platform, and with good reason. Measured over five years, Fundsmith Equity is up a thumping 154%, while Lindsell Train Global Equity is up 125%. Both thrashed their benchmark, which grew 81% over the same period.
Almost 70% of Fundsmith Equity is invested in the US, which has held up in the stock market crash. Microsoft, PayPal and Facebook are the three biggest holdings in his portfolio. This is largely a US fund and has benefited from that country’s lengthy bull run.
Lindsell Train Global Equity also has hefty US exposure, with PayPal, PepsiCo, Intuit and Walt Disney all in the top 10. Nick Train gives UK shares more exposure, with Unilever his fund’s single biggest holding at 8.79%, while Diageo is the third biggest at 7.65%, followed by the London Stock Exchange at 7.3%. Train’s second biggest stake is in Heineken Holdings.
American hero
While both funds have held up, others in AJ Bell’s top 10 most popular funds have fared better since the stock market crash. Baillie Gifford American, third most popular, has thrashed them both by growing an incredible 101.3% in six months. Baillie Gifford Global Discovery grew 72.6% and Baillie Gifford Positive Change returned 71.3%. That’s an impressive hat-trick by the fund manager.
Tech also features heavily in the AJ Bell list of 10 most popular funds. Polar Capital Global Technology is up 43.6% since the stock market crash, with L&G Global Technology up 47%. These funds benefited as the internet remained open for business.
The most popular funds before the stock market crash remain broadly the most popular today, which suggests investors have not revised their views too much. I’ll be interested to see how long Smith and Train can remain top of the tree.