LINDSELL TRAIN GLOBAL EQUITY

pip895

My sister has LT Global in her ISA running alongside a global tracker.  It has had a terrible 2021 and she asked me if I thought she should dump it in favour of Fundsmith which she has in her SIPP and fared much better. 

I am thinking that it may be better to stick with it - it has lost less in 2022 than either the tracker or Fundsmith.  Does anyone else on here invest in LT Global - what are your thoughts?  Could it be coming into its own or has it gone seriously astray?

bostonerimus

Are you basing this decision purely on past performance? If your sister is going to invest in such active funds that are driven by a particular philosophy she should understand what she is buying. Who knows what will happen to LT or Fundsmith. Stick, change or just toss a coin IMO.

Thrugelmir

Investing on the basis of historic performance then dumping the stock at the first sign of a dip isn't a good strategy. Nor is reinvesting the money into another fund purely because the recent performance has been good. The portfolio your sister holds needs to be viewed as a whole not as component parts in isolation.  As what really matters in the short term is the overall return achieved. Investment decisions should be rationalised and justified to oneself. Today's laggards maybe tomorrow's better performers. 

Zola.

Probably worth waiting it out and moving out of that fund when its in the green again, it will come back, just might take longer than say an index...

She will additionally need to reassess her investing strategy and psychology if a bad year makes her consider chucking the towel in and realising losses. 

Its a marathon after all...

Prism

Hard to say over the short term. It still makes up around half of my wife's SIPP. One of the best performing global funds so far this year but its the long term that matters.

Alexland

Sounds like either a global tracker or multi asset fund would be more suitable for her than just chasing whichever fund manager has done well recently and hoping it will continue which is a poor strategy. Economic conditions seem to be fundamentally changing and concentrated investment styles that worked in the past are looking less attractive for the future.

pip895

Sorry I should have said she has been in it for years and was happy with it - it is just the 2021 performance that is concerning her a little - I'm trying to get a feel for how it is regarded - and the reasons for its poor performance (UK/Value bias?)- it used to get mentioned on here quite a bit. 

My initial position is that she should hold on to it - There is little point in her holding a fund that just mirrors her main holding (Global tracker) and I have learnt the hard way that its the point when you decide to throw in the towel that fortunes tend to turn around. [but then there was Woodford!]

aroominyork

LT and Fundsmith are often mentioned in the same breath as if they are equivalent, but that only goes so far. They both favour established large companies where they expect steady (as opposed to Baillie Gifford-style dramatic) growth. But look deeper and you will see differences in the sectors where they invest. LT goes primarily for consumer brands. Fundsmith is a mix of consumer and business-facing businesses, and also has a slant towards technology and healthcare. So do some research, understand them and then make your choice.

bostonerimus

For most people the hardest part of investing is when things are falling and you start to lose money rather than making it. Rarely has any thought gone into what to do when this happens. I use a couple of indexes and a single managed multi-assed fund and I basically do nothing when things fall. 

Thrugelmir

pip895 said:

 and the reasons for its poor performance (UK/Value bias?)-

Benchmarked against ??  

Anything global fund with a higher weighting to the supercharged mega cap US stocks over the past year would have performed better in relative terms. That's the nature of investing. Hence why many inexperienced investors find themselves churning thier portfolios chasing shadows. Underperformance should be viewed over a longer timescale. Fund managers typical chose investments with a forward looking 3 to 5 year time frame. It's not like backing horses at the bookies. Companies need time to implement growth strategies.