Performance of investment trust vs sector over 10-yrs
| Vehicle | 1-yr returns (%) |
3-yr returns (%) | 5-yr returns (%) | 10-yr returns (%) |
| IT Global Growth sector |
24.78 | 19.36 |
27.32 |
76.13 |
| Lindsell Train Ltd - Lindsell Train IT |
37.82 | 66.82 |
104.81 |
120.91 |
Source: Financial Express Analytics
Financial Express data suggests Lindsell Train Investment Trust has outperformed its IT Global Growth sector over one, three, five and 10 years, which the manager attributes to his buy-and-hold philosophy.
Train (pictured right) freely admits, however, that this strategy can mean the trust may lag its peers or suffer discrete period losses.
"I have a very clear distinction in my mind between momentum investing and value investing. I’m a value investor, which can mean that discrete period performance can be almost random," he said.
"Metals, gold and oil exploration are where the action – or the easy money – is at the moment, so I thought we’d have been penalised for not holding those sectors in the portfolio in 2010."
The trust outperformed its FTSE All Share benchmark by 14 per cent in 2010, returning 28.7 per cent. By the same token, the fund lost 31 per cent in 2008, while the benchmark lost 30.1 per cent.
The core of Lindsell Train IT’s portfolio has not changed since its launch 10 years ago, favouring breweries, media stocks and financials. Brewery Youngs, media group Daily Mail & General, and Iron Bru manufacturer AG Barr are among the stocks to have stayed in the portfolio.
In spite of the fund's outperformance, Train admits his buy-and-hold strategy doesn’t always pay off: "Reed Elsevier is one stock we bought a decade ago, believing it to be undervalued. It’s yet to perform well for me," he said.
"Its dividend has grown, but it’s not given great growth overall."
Other media stocks have boosted the fund recently, however, with Pearson, Euromoney and Daily Mail & General all contributing to last year’s outperformance.
While portfolio turnover is very low, Train has recently sold out of Lloyds Bank preference shares and bought holdings in Green King.