Morningstar downgrades Process Pillar rating on Lindsell Train Global Equity

From Morningstar: 2024-07-17 09:04:00

Lindsell Train Global Equity’s investment philosophy and experienced managers have been beneficial. However, issues with opportunity costs, management quality evaluation, and geographic biases have led to a diminished competitive position, resulting in an average Process Pillar rating. The fund retains an Above Average People Pillar rating for its helpful defensive qualities.

Co-founders Michael Lindsell and Nick Train leverage their 30+ years of experience to manage a highly concentrated portfolio of high-quality, cash-generative businesses globally. The investment philosophy aims to outperform the market long-term by holding strong franchises. Strict criteria drive the stock selection process, supported by in-depth fundamental analysis by managers and analysts.

Morningstar Metrics for Lindsell Train Global Equity include a Bronze Medalist Rating, ★★★ Morningstar Rating, Large Cap Global Growth Category, total assets of £4.3 billion, and inception date of March 3, 2014. The managers’ deep understanding of company strategy and intellectual property value, coupled with a highly-concentrated, unconstrained approach, have influenced the fund’s regional and sector deviations within the category index.

Recent performance of Nick Train’s fund has lagged behind category and global growth indexes, attributed in part to Japanese consumer staples companies, beverage holdings like Diageo and Brown Forman, and Hargreaves Lansdown and Pearson positions. Despite some successful holdings like Nintendo and Intuit, net outflows in recent years have brought different behavioral biases that require monitoring. Assets stood at around £8.6 billion at end-May 2024, and capacity considerations remain under review.



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