Star Money Manager Nick Train Warns of Worst Returns in 20 Years
(Bloomberg) -- U.K. money manager Nick Train said his listed investment fund Lindsell Train Investment Trust Plc is experiencing its worst performance since it started business.
“I will not make flippant or complacent predictions about prospects for Lindsell Train Limited, as we experience arguably the worst period of relative investment performance in our 20-year history,” Train said in the closed-end fund’s half-year results.
Lindsell Train, which manages more than 23 billion pounds ($30.5 billion), was co-founded by Train and fellow money manager Michael Lindsell in 2000 and runs several funds and trusts. Train sought to reassure investors about the long-term prospects of the firm’s investment trust, which manages 241 million pounds and whose share price has dropped almost 10% this year.
“Protecting the long-term value of your savings, after the effects of inflation and tax is no trivial challenge,” he said in the statement. “It is indeed a battle and although taking some risk in battle is unavoidable, you better not take frivolous risks or indulge in what you know is long-term losing behaviour. Because if you do, you run the risk of defeat.”
The Lindsell Train Global Equity Fund, one of the most popular among U.K. retail investors, has underperformed its peers over the past 12 months as well as over the past three years, after previously outperforming them. Its assets, which peaked at more than 9 billion pounds at the end of June, have since shrunk by more than 1 billion pounds, according to data compiled by Bloomberg.
“Lindsell Train has a very particular investment philosophy which focuses on companies with robust brands, balance sheets and earnings streams, and this style can be expected to move out of step with the wider market, sometimes for better, sometimes for worse,” Laith Khalaf, an analyst at AJ Bell wrote in a note on Wednesday. “The managers have earned plenty of credit in the bank, which will likely mean most investors stay on board with Lindsell Train for now.”
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