Lindsell Train Global: what the hell is going on here?

arwain

iglad wrote: »

isn't it good that I asked the question?

It certainly is, not sure about your 3/4 number though. I would imagine less than 10% of all investors actually understand what they are investing in. A lot of people just look at which fund is or has been the top of the charts for say the last year or two and put their money into that.

shinytop

arwain wrote: »

It certainly is, not sure about your 3/4 number though. I would imagine less than 10% of all investors actually understand what they are investing in. A lot of people just look at which fund is or has been the top of the charts for say the last year or two and put their money into that.

Guilty as charged. I bought a couple of star funds because they had done well and hoped that would continue, which it did for a while. I didn't buy much in relative terms and overall I haven't lost out - yet - but it's opened my eyes. I'm the sort of person who will kick themselves a lot harder if I lose money than if I don't make as much as I might have. My most recent investments have been multi-asset tracker type funds and I'm much happier. I know they can/will go down as well but if they do at least everyone else's will have as well

Chino

arwain wrote: »

Excellent post bowlhead I learn a great deal from posts such as that.

badger09 wrote: »

Agreed

OK, but do either of you check the facts and claims in posts such as that?

If not, you're just going to make the same mistakes yourselves.

bowlhead99

Chino wrote: »

OK, but do either of you check the facts and claims in posts such as that?

If not, you're just going to make the same mistakes yourselves.

That doesn't really follow.

If you are trying to understand what a particular fund does or what is behind its performance in a particular timeframe with a view to investing in it, you would obtain the information from the fund manager and review it with the help of third party data sources about the fund, its holdings and broader market information. The independent data would help you get comfortable with what the marketing / investor reporting produced by the manager was telling you, although it can be difficult to prove that the manager's performance was as a result of sound judgement calls which paid off rather than lucky calls which happened to work out and for which the manager belatedly came up with an explanation. It's sensible to check and verify what you read as part of your research.

If instead you are not carrying out a specific piece of investment research yourself, and just curious how somebody would find out the drivers of a performance difference between an index and an investment product:

- a person on a forum thread explains with examples some of the factors that would help you look into it (holdings information, annual reports, monthly manager commentaries, market data, media reports on the fund and its key holdings, market data such as stock prices, exchange rates, index movements and index composition and so on).

- you might 'learn a lot' about some of the things to consider in carrying out your investment research

But you don't actually need to 'fact check' the examples quoted in such a post, as you're not relying on the information. The specifics of FX movements or exactly what happened to a couple of holdings or how much Apple makes up of the S&P or what exactly the last manager commentary discussed, is not important for when you come to actually do a review yourself, as the facts next time will be different. You can still learn concepts of what might be useful to look at, without proving any facts at all.

For example, I could have said that one of the reasons for the fund lagging the index was partially because an index is computed with zero management fees or running costs or transaction charges, whereas a real-world actively managed fund would incur all of them and have a natural half percent performance disadvantage over six months, so could fall while 'the market' rises. If you fact checked me on that, you might determine that the OCF plus transaction costs on LT Global was actually 0.4% or 0.6% per six months, not specifically half a percent like I said.

However, failing to fact check me on the throwaway 'half a percent' comment doesn't make you prone to make a mistake when you are actually doing a review yourself, because the concept is what is important, not the actual figures.

bostonerimus

With the emergence of DC pensions, investment funds are the default method most people now have to fund their retirement. Because most of those people are not financial geeks, and are not going to research fund managers or individual equity allocations, they should stick with a few simple funds and a few simple rules. That's what I did, and still do. I see far too many people worrying about the funds they own rather than their budgets and the way they manage their investments and finances. The OP is a good example who is phased by a drop in LT Global and immediately compares it to the other media darling of Fundsmith. This is a recipe for heartburn and poor decision making. And we are back to the simple rules, the OP should have a rebalancing/selling strategy that they should be ready to implement before owning something like Lindsell Train or Fundsmith or just stick with a multi-asset fund that automatically rebalances.

Moe_The_Bartender

Nick Train said this in June:

'We love to outperform for our investors, but have to state the obvious: it would not at all be a surprise if such a highly concentrated portfolio that had performed well embarked on a period of poor performance at some point.'

You can’t say you weren’t warned.

iglad

bowlhead99 wrote: »

That doesn't really follow.

If you are trying to understand what a particular fund does or what is behind its performance in a particular timeframe with a view to investing in it, you would obtain the information from the fund manager and review it with the help of third party data sources about the fund, its holdings and broader market information. The independent data would help you get comfortable with what the marketing / investor reporting produced by the manager was telling you, although it can be difficult to prove that the manager's performance was as a result of sound judgement calls which paid off rather than lucky calls which happened to work out and for which the manager belatedly came up with an explanation. It's sensible to check and verify what you read as part of your research.

If instead you are not carrying out a specific piece of investment research yourself, and just curious how somebody would find out the drivers of a performance difference between an index and an investment product:

- a person on a forum thread explains with examples some of the factors that would help you look into it (holdings information, annual reports, monthly manager commentaries, market data, media reports on the fund and its key holdings, market data such as stock prices, exchange rates, index movements and index composition and so on).

- you might 'learn a lot' about some of the things to consider in carrying out your investment research

But you don't actually need to 'fact check' the examples quoted in such a post, as you're not relying on the information. The specifics of FX movements or exactly what happened to a couple of holdings or how much Apple makes up of the S&P or what exactly the last manager commentary discussed, is not important for when you come to actually do a review yourself, as the facts next time will be different. You can still learn concepts of what might be useful to look at, without proving any facts at all.

For example, I could have said that one of the reasons for the fund lagging the index was partially because an index is computed with zero management fees or running costs or transaction charges, whereas a real-world actively managed fund would incur all of them and have a natural half percent performance disadvantage over six months, so could fall while 'the market' rises. If you fact checked me on that, you might determine that the OCF plus transaction costs on LT Global was actually 0.4% or 0.6% per six months, not specifically half a percent like I said.

However, failing to fact check me on the throwaway 'half a percent' comment doesn't make you prone to make a mistake when you are actually doing a review yourself, because the concept is what is important, not the actual figures.

You did mention in your earlier post that the FTSE 100 was down over 3 1/2 months but according to the HL performance tables the FTSE was up over 3 months and 6 months. I am unable to get that 3 1/2 months and would love to know where you got it so I can take a look.

As LTG has about 1/3 invested in the UK I would have expected a little bit of a bounce.

So yes It's always good to fact check.

iglad

Moe_The_Bartender wrote: »

Nick Train said this in June:

'We love to outperform for our investors, but have to state the obvious: it would not at all be a surprise if such a highly concentrated portfolio that had performed well embarked on a period of poor performance at some point.'

You can’t say you weren’t warned.

I have a 'sell level' not quite near it yet. lol

benbay001

iglad wrote: »

I have a 'sell level' not quite near it yet. lol

Trying to calculate a correct value for a fund of 29 stocks is so futile you may as well buy the underlying shares.

ffacoffipawb

bostonerimus wrote: »

With the emergence of DC pensions, investment funds are the default method most people now have to fund their retirement. Because most of those people are not financial geeks, and are not going to research fund managers or individual equity allocations, they should stick with a few simple funds and a few simple rules. That's what I did, and still do. I see far too many people worrying about the funds they own rather than their budgets and the way they manage their investments and finances. The OP is a good example who is phased by a drop in LT Global and immediately compares it to the other media darling of Fundsmith. This is a recipe for heartburn and poor decision making. And we are back to the simple rules, the OP should have a rebalancing/selling strategy that they should be ready to implement before owning something like Lindsell Train or Fundsmith or just stick with a multi-asset fund that automatically rebalances.

I have both Fundsmith and LTGE in my uncrystallised SIPP.

The former is down 3.42% on purchase cost in July and the latter is down 5.96% (bought on the same day).

Not much in it and the difference is minuscule. Just noise.

Blue Whale also bought on same day is down 4.98%.

All these are Income class, not Accumulation. Income pays the platform charges.

As I am over LTA when I crystallise this I am going heavy on speculative stuff, but not on anything dodgy.

If I am paying LTA tax on these I wont care too much if these go badly.