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The most consistent IA UK All Companies funds of the decade

17 January 2019

Two funds in the sector have beaten the sector average in nine of the past 10 years, while another one has a 100 per cent record.

By Anthony Luzio,

Editor, FE Trustnet Magazine

LF Lindsell Train UK Equity is the most consistent IA UK All Companies fund of the past decade, beating the sector average in every single one of the past 10 calendar years.

Of the 208 funds in the sector with a track record of this length, another two – Aviva Investors UK Equity MoM 1 and Liontrust Special Situations – outperformed their peer group composite in nine of the past 10 years, while another 12 managed this feat in eight.

Performance of funds vs sector

Source: FE Analytics

Nick Train (pictured), the FE Alpha Manager who runs LF Lindsell Train UK Equity, believes the market undervalues durable, cash-generative business franchises.

Analysts at FE Invest said he aims to identify companies that will survive over the long term by maintaining their competitive advantages through monitoring changing tastes and staying ahead of structural market changes.

“We like the consistency of his strategy, which will not vary depending on the economic conditions,” the analysts added.

“His very selective approach allows him to run a highly concentrated portfolio (with high liquidity risk), which should boost the fund’s returns if his stockpicking is successful.”

Tom Stevenson, investment director for personal investing at Fidelity International, recently named LF Lindsell Train UK Equity as one of his fund picks for this year.

“Investors are largely shunning UK assets and valuations have, as a consequence, reached very interesting levels,” he added. “The yield on the FTSE 100 at 4.6 per cent is compelling in an environment of lower-for-longer interest rates.

“Despite my enthusiasm for the UK, I am not going the whole hog and recommending a cyclical, value fund or one biased towards the domestic stocks that have been hit hardest by Brexit concerns.

“Rather, I am sticking with Nick Train’s growth and quality focus. This should provide some protection if things do not turn out as I hope for the UK but will capture plenty of the upside if 2019 turns out better than feared.”


Stevenson added: “The Lindsell Train UK Equity fund has not been immune to recent market volatility and this feels like a good entry point into this highly concentrated fund packed with excellent buy-and-hold stocks.”

LF Lindsell Train UK Equity made 362.62 per cent over the 10-year period in question, compared with 144.96 per cent from the IA UK All Companies sector and 138.35 per cent from the FTSE All Share.

The £5.5bn fund has ongoing charges of 0.7 per cent.

Aviva Investors UK Equity MoM 1 has been managed by Lindsell Train since 2008, according to data from FE Analytics, and is run in exactly the same way, using the same methodology, as LF Lindsell Train UK Equity. As a result, the funds have eight top-10 holdings in common.

“Lindsell Train’s UK Equity portfolios are highly concentrated in what we judge to be exceptional businesses, and our primary research focus is on companies that can achieve sustainably high returns on capital,” said a statement from Lindsell Train.

“When we find an exceptional business we intend to hold it for the long term, which for us means several economic market cycles. Resisting the temptation to trade or just ‘do something’ requires a high conviction in one’s investment thesis and also the ability to be patient.

“We find the large majority of our candidate investments for our UK equity portfolios in three broad industry categories (consumer branded goods, internet/media/software and financials) and in businesses that exhibit characteristics that we associate with durability.

“We believe it is the consistency of the application of the Lindsell Train investment process, through all market environments, that gives us the best chance of meeting our clients’ expectations.”

Aviva Investors UK Equity MoM 1 has made 375.49 per cent over the past decade. It has £380m in assets under management and has ongoing charges of 1.02 per cent.

Liontrust Special Situations is headed up by FE Alpha Managers Anthony Cross and Julian Fosh, who use what they call the Economic Advantage strategy – this means only investing in companies that possess at least one of three intangible barriers to competition: intellectual property, a strong distribution network, or high contracted recurring income.

The team at Square Mile Investment Consulting & Research said the fund benefits from a number of compelling attributes.

“Liontrust's Economic Advantage team of four may be modest in number but it works in a highly collegiate manner and its members offer complementary skill sets,” they noted. “This is a very well-considered and defined investment process which steers the managers towards relatively steady businesses that are gradually growing and generating high levels of cash.”

“The team operates with a disciplined adherence to its investment process, where the managers are fully prepared to exit those companies that lose their idiosyncratic advantage or fail to translate it into superior returns.

“Nevertheless, the thoroughness of the approach and experience of the team mean that stock turnover in any given year tends to be on the low side.”


Liontrust Special Situations has made the highest 10-year return of the three funds mentioned here, at 381.21 per cent. It is £3.9bn in size and has ongoing charges of 0.87 per cent.

Performance of funds vs sector and index over 10yrs

Source: FE Analytics

The fund has 46.4 per cent of its assets in FTSE 100 companies with a slightly smaller amount split between small, medium and AIM stocks. It currently has 9 per cent of the portfolio in cash.

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.