Investments  

Lindsell Train sees £300m inflows a month

Lindsell Train sees £300m inflows a month

Open-ended funds managed by Lindsell Train have been attracting inflows of about £300m a month in 2019, according to data compiled by FTAdviser.  

The Lindsell Train UK Equity fund has been attracting inflows of £47m a month in 2019, amounting to net new money of £375.4m in the eight months to August, down about 25 per cent on the flow it saw last year. 

The data should be seen in the context of data from the Investment Association showing investors have withdrawn £12bn from UK equity funds since the UK voted to leave the European Union in June 2016. 

Data from Morningstar shows the firm’s Ireland domiciled Global Equity fund has had net inflows of £2.1bn in the first eight months of 2019, at a rate of £262m a month.

The fund's inflows already amount to nearly twice the total of 2018, when it attracted just over £1bn of net new money.

Both funds were removed from Hargreaves Lansdown’s buylist in July 2019, as the company was concerned about the perception of a conflict of interest as a result of the Lindsell Train UK Equity fund being a substantial shareholder in Hargreaves Lansdown.

The removal from the buylist does not seem to have negatively impacted demand from Hargreaves Lansdown clients however, as both funds were among the top ten most bought by clients of the platform in August. 

The £7.3bn Lindsell Train UK Equity fund has returned 17 per cent over the past year, compared with a loss of just less than 1 per cent for the average fund in the IA UK All Companies sector in the same time period. 

The £8.9bn Lindsell Train Global Equity fund returned  74 per cent over the past three years, compared with 36 per cent for the average fund in the Investment Association Global sector in the same time period. 

Adrian Lowcock, head of personal investing at Willis Owen, said the nature of the funds' investments, in very large companies, means the funds are unlikely to suffer from a problem with liquidity if the manager has to sell a position. 

He added: “The inflows into the UK fund are impressive in the context of the widespread negativity towards UK assets. Mr Train’s style, which is defensive growth, is very much in vogue right now.”

But Ben Willis, head of portfolio management at advice firm Chase De Vere, warned the investment style could fall out of favour.

He said: “This is a fund that we continue to use with our clients despite its increased size, as the manager’s investment approach and positioning make it scalable; much of the fund is invested in UK large or mega cap companies. 

"The fund size is unlikely to be the primary factor if the fund underperforms going forwards. It will more likely be because Nick Train’s’ investment style has fallen out of favour. This has been predicted many times in recent years and yet the fund continues to deliver.”