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Knowledge gained on US market from new fund is expected to benefit Lindsell Train’s global equity product
Thursday 21 May 2020 Author: Mark Gardner

In a sign the asset management industry remains active despite the current market volatility Lindsell Train has launched its first new fund in nearly a decade with Evenlode Investment separately moving forward with plans for a new product targeting global stocks.

The LF Lindsell Train North American Equity fund was quietly launched last month, with Lindsell Train saying the fund will need to build up a ‘meaningful track record’ – which could take up to five years – before it is marketed to external investors.

That means it is essentially an internal product for now and not something in which retail investors can put money for some time.

Interestingly, it will be the first Lindsell Train vehicle not steered by either Michael Lindsell or Nick Train, the well-respected fund managers and owners of the asset management business.

Instead it is being managed by James Bullock, who joined the firm in 2010 and co-manages Lindsell Train Global Equity Fund (B3NS4D2). He will be supported by Madeline Wright who has been a deputy portfolio manager at Lindsell Train for the past year and previously fund manager’s assistant since 2012.

Not much is known about what will be in the new portfolio, but it is likely to have an overlap with the US holdings of Lindsell Train Global Equity.

In its rationale for launching the new US fund, Lindsell Train said: ‘Given the US is a critical market for our Global Equity strategy (with over 40% of our Global universe being US companies), any broadening or deepening of our knowledge should additionally benefit the global portfolios.’

Entertainment giant Disney is the largest US holding in the Global Equity fund, followed by confectionary maker Mondelez International and payments company PayPal.

It’s worth noting the US has been a tough nut to crack for active managers. Data as of 31 December 2019 from Standard & Poor’s showed that 80.6% of actively managed funds underperformed the S&P 500 over five years, with 71.13% underperforming over three years and 70.98% underperforming over one year.

While it’s not entirely clear what the new fund will invest in, comments about Amazon from Train in the latest Finsbury Growth & Income (FGT) update – another fund run by Lindsell Train – might provide some insight.

Describing Amazon’s $900bn market cap as sobering, Train added: ‘That is the equivalent of 15 Diageos – to pick the biggest FTSE All-Share constituent we own in your portfolio.

‘That astounds me. I don’t know if it’s crazy. But what the success of Amazon as a business and an investment tells us is clear. It is that every company we invest in must be judged not only on its likelihood of surviving the crisis, but also on its fitness for prospering in a world where Amazon and its ilk can get so big.’

Meanwhile, asset manager Evenlode has appointed James Knoedler as co-portfolio manager for a new global equity fund to be launched in the next 12 months.

There is an expectation that the fund will be run along similar lines to the existing Evenlode Global Income Fund (BF1QMV6) but without the emphasis on dividends.

DISCLAIMER: Editor Daniel Coatsworth has a personal investment in Evenlode Global Income

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