Lindsell Train Global Equity

Thrugelmir

A_T said:

Thrugelmir said:

Johnnyboy11 said:

Moe_The_Bartender said:

Thrugelmir said:

csgohan4 said:

Johnnyboy11 said:

csgohan4 said:

Have you considered Fundsmith or it's sustainable sister fund which has no oil/gas which is useful in the long run.

I am still mulling on ditching my cheap index tracker for the active funds on offer, SMT is still an option, although maybe the boat has sailed for that one

Yes, Fundsmith Equity currently makes up 16% of my portfolio, compared with LTGE at around 10%. I've avoided SMT, even during the recent dips. I'm thinking of going in the opposite direction and investing mainly in cheap global equity trackers.

While I appreciate no fund is risk free, the global trackers are a safer bet, than an active fund, woodford being a prime example

Being devil's advocate. If the unlisted/small company stock was backed by Gates \Bezos\ Musk then the share price would be heading towards the moon. Woodford was one of the main proponents in the UK of backing start-up's. So is actually a great loss. Yet all we hear now is that the UK doesn't haven't good new companies to invest in. Retail investors are a fickle bunch. Bottom line is that hate risking their capital. Herd investing rules at the current time.

But Woodford shouldn’t have been backing start ups in an Equity Income fund. The clue is in the name. If he wanted to back start ups, the fund should have been defined as such instead of which he was effectively running two separate funds under a single badge. 

His Patient Capital Trust was where his start ups should have been.

And arguably LTGE shouldn't be betting the farm on a handful of large caps in a 'Global Equity' marketed fund (The largest 5 holdings currently represent 37% of the fund). Does anyone holding this Global Equity fund really thinks an 8.43% holding in Unilever makes good sense and is to be expected? I don't, hence my concers and decision to exit.

Unilever is a boring defensive company. Never going to be high growth. But will churn out profits year in year out.  

Take any global tracker and the top 20 holdings are going to account for around 20% of the value. (VWRL has over 3,400 holdings in total). 

Unilever's strength is it's huge presence in emerging markets - whose populations are growing with increasing consumer appetites - there's a lot of potential for growth.

Lower margins than developed markets though. 

Prism

Johnnyboy11 said:

Moe_The_Bartender said:

Thrugelmir said:

csgohan4 said:

Johnnyboy11 said:

csgohan4 said:

Have you considered Fundsmith or it's sustainable sister fund which has no oil/gas which is useful in the long run.

I am still mulling on ditching my cheap index tracker for the active funds on offer, SMT is still an option, although maybe the boat has sailed for that one

Yes, Fundsmith Equity currently makes up 16% of my portfolio, compared with LTGE at around 10%. I've avoided SMT, even during the recent dips. I'm thinking of going in the opposite direction and investing mainly in cheap global equity trackers.

While I appreciate no fund is risk free, the global trackers are a safer bet, than an active fund, woodford being a prime example

Being devil's advocate. If the unlisted/small company stock was backed by Gates \Bezos\ Musk then the share price would be heading towards the moon. Woodford was one of the main proponents in the UK of backing start-up's. So is actually a great loss. Yet all we hear now is that the UK doesn't haven't good new companies to invest in. Retail investors are a fickle bunch. Bottom line is that hate risking their capital. Herd investing rules at the current time.

But Woodford shouldn’t have been backing start ups in an Equity Income fund. The clue is in the name. If he wanted to back start ups, the fund should have been defined as such instead of which he was effectively running two separate funds under a single badge. 

His Patient Capital Trust was where his start ups should have been.

And arguably LTGE shouldn't be betting the farm on a handful of large caps in a 'Global Equity' marketed fund (The largest 5 holdings currently represent 37% of the fund). Does anyone holding this Global Equity fund really thinks an 8.43% holding in Unilever makes good sense and is to be expected? I don't, hence my concers and decision to exit.

As A_T points out, Unilever is basically a play on emerging markets without the direct holdings. Stewart Investors three main emerging markets funds all hold between 5-6% in Unilever for example. Its also a reasonable sized holding in Fundsmith. Its probably one of the best defensive growth companies around.

csgohan4

To be fair LTGE could be good for some other investors, if it suits your portfolio. There is no one size fits all. 

One man's meat is another man's poison

Johnnyboy11

I'm sure Unilever is a great Company, paying a reliable dividend, but it's still one Company and not without risk, particularly where the environment is concerned. Aren't the Greens in Holland mooting a massive exit tax on Unilever...?

Thrugelmir

Johnnyboy11 said:

I'm sure Unilever is a great Company, paying a reliable dividend, but it's still one Company and not without risk, particularly where the environment is concerned. Aren't the Greens in Holland mooting a massive exit tax on Unilever...?

Welcome to the world of investing. Risk takes many many forms. Global funds are no less exposed. Given the high US weighting. Nor are the Chinese companies renowned for their Corporate Governance standards. 

Moe_The_Bartender

The Dutch would really be shooting themselves in the foot if they imposed an exit tax as no sensible business would choose to invest there.

I hesitate to invest in emerging markets not only because of the corporate governance issue but also the political risk.

kinger101

A_T said:

Thrugelmir said:

Johnnyboy11 said:

Moe_The_Bartender said:

Thrugelmir said:

csgohan4 said:

Johnnyboy11 said:

csgohan4 said:

Have you considered Fundsmith or it's sustainable sister fund which has no oil/gas which is useful in the long run.

I am still mulling on ditching my cheap index tracker for the active funds on offer, SMT is still an option, although maybe the boat has sailed for that one

Yes, Fundsmith Equity currently makes up 16% of my portfolio, compared with LTGE at around 10%. I've avoided SMT, even during the recent dips. I'm thinking of going in the opposite direction and investing mainly in cheap global equity trackers.

While I appreciate no fund is risk free, the global trackers are a safer bet, than an active fund, woodford being a prime example

Being devil's advocate. If the unlisted/small company stock was backed by Gates \Bezos\ Musk then the share price would be heading towards the moon. Woodford was one of the main proponents in the UK of backing start-up's. So is actually a great loss. Yet all we hear now is that the UK doesn't haven't good new companies to invest in. Retail investors are a fickle bunch. Bottom line is that hate risking their capital. Herd investing rules at the current time.

But Woodford shouldn’t have been backing start ups in an Equity Income fund. The clue is in the name. If he wanted to back start ups, the fund should have been defined as such instead of which he was effectively running two separate funds under a single badge. 

His Patient Capital Trust was where his start ups should have been.

And arguably LTGE shouldn't be betting the farm on a handful of large caps in a 'Global Equity' marketed fund (The largest 5 holdings currently represent 37% of the fund). Does anyone holding this Global Equity fund really thinks an 8.43% holding in Unilever makes good sense and is to be expected? I don't, hence my concers and decision to exit.

Unilever is a boring defensive company. Never going to be high growth. But will churn out profits year in year out.  

Take any global tracker and the top 20 holdings are going to account for around 20% of the value. (VWRL has over 3,400 holdings in total). 

Unilever's strength is it's huge presence in emerging markets - whose populations are growing with increasing consumer appetites - there's a lot of potential for growth.

They're highly innovative too.  For example, developing sustainable alternatives to palm oil, and developing new combinations of enzyme and detergent that work well at lower temperatures.  They don't take their position for granted.

iglad

Johnnyboy11 said:

I took an executive decision today to throw Lindsell Train Global Equity under a bus. Sell orders will be placed over the weekend.

Main reasons being....

- 1% return over the past 12 months is rubbish relative to the market sector it purports to operate in (and will be mostly wiped out by fees)

- It's an obvious laggard in my portfolio, with my preference now to stick with global equity trackers which have done much better

- Concentration of the fund into a handful of European/ UK stocks in sectors that are obviously struggling

- Poor outlook for the UK/ Europe due to COVID mishandling, whch I don't see improving any time soon

- Getting out before the stampede.

Any thoughts?

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/lindsell-train-global-equity-class-d-income

I sold mine in January for some of the reasons you listed above and also Pearson ( how many more profit warnings) , I don't like investing Japan and the large UK slice also add in the poor returns in the previous 12 months and it was enough for me. I actually put the money into my tech funds which are up about 40% so I think I did the right thing. 

DairyQueen

OP: if your (new) strategy is to concentrate on global passives that seems a reasonable reason to sell LT but I wouldn't choose that strategy just because global passives 'have done much better' over a short period. What are the aims of your strategy?  I disagree with your other reasons. It takes a level of political insight and in-depth knowledge of markets/economics that the majority of we DIY-investors lack to make those kind of judgements.

The execution of my strategy is high level as I do not have the expertise to determine whether a particular stock could be a winner. Nor can I time the market or foresee events that could impact a particular asset class, sector or region. As I invest for the long term a specific fund's performance over 12 months isn't material. Diversification is a key part of my strategy so I do not buy or sell sectors/asset classes/regions/funds based on recent performance.

I adopt a 'whole of market' approach rather than hanging-on to the coat-tails of recent star regions/sectors/funds. Been there, been burned. The Dotcom bubble was a salutary lesson for me and many others. I shudder when I recall the length of time it took, for example, big techs like Microsoft to recover their previous highs (over a decade).

I don't hold Lindsell Train but would consider buying it if I had a suitable gap in my portfolio. I do hold Fundsmith but it was a lucky purchase I made before adopting a strategy that met my aims rather than just buying 'what is popular and doing well this year'. FS doesn't fit the now-refined strategy so I am selling it.

In January 2018, I had gaps in the portfolio that included being underweight in small caps and in some regions. I bought satellite funds to fill the gaps including Fidelity China Special Situations. It was a relative under-performer in my portfolio for the next couple of years so when I rebalanced asset allocations in Feb of this year I added to that holding. It has since rocketed. Who could tell that events would trigger a turnaround in market sentiment this year? Not me.

There are always events that will advantage one fund/region/sector/asset class over another. The majority of these events have a temporary impact within the context of a multi-decade investment timeframe. Investing in response to events and/or short-term performance is unlikely to be a successful and sustainable strategy. It certainly wasn't for me.

Why did you chose LT originally? How did it fit into your portfolio? Why LT and not FS? What has so significantly changed about the fund or your strategy (other than recent performance relative to a completely different type of fund - i.e. a global passive) that you feel compelled to sell it? 'Obvious laggards' over short timeframes are a feature of most portfolios. It goes with the territory of diversification, and diversification should be a key consideration when building a sustainable, long-term portfolio.

Johnnyboy11

Thanks DQ. My current investment strategy is a simple core of global passives VLS60/ V-FTSE-DW-ExUK and two satellites, Fundsmith Equity (16%) and LTGE (10%), both selected for no other reason than they were performing well and popular on the HL platform. Not the most exciting strategy, or objective selection process, but I don't have the insight or inclination to change or manage it much, other than to periodically monitor the performance of the two satellites. A lot of views have been expressed on this thread, which is great, and rightly or wrongly I'm still circumspect regarding LTGEs recent performance and mid-term prospects, hence my decision to exit and look for something else to fill that satellite slot.