Lindsell Train UK Equity Fund

This week’s investment idea is simple – invent a time machine, take yourself twenty years into the future, and check out which companies are still doing well. Hop back to the present, buy them now, and enjoy the next few decades watching the share price rise.

If only. Sadly, it looks like we’re a fair way off from mastering time travel. But there is a strategy that might be the next best thing for finding companies that will still be around in 10, 20 or even 50 years’ time. Nick Train, Manager of the Lindsell Train UK Equity fund, believes the key is finding strong brands.

It’s all in the name

The UK stock market is home to a number of businesses that sell their products globally. The brands Lindsell Train own have been eaten, drunk or used in households around the world for decades, and in some cases, centuries.

What’s more, these brands have exceptionally loyal customers. One such business is global drinks business, Diageo. Whilst the company itself was founded in 1997, its brands have been enjoyed for much longer. If you enjoy a pint of Guinness (founded in 1759), or a Scotch Whisky such as Johnnie Walker (founded in 1820), you are drinking a product owned by Diageo. And more people around the world are enjoying these premium brands than ever before, something Nick Train thinks will be the case for many years to come.

One of the manager’s most recent buys was personal care company, PZ Cussons. You may not know the name, but in 2020, you may well have used brands such as Imperial Leather or Carex to keep your hands clean. And until we can go on holiday again to sunnier climes, using St Tropez lotion might be the only way we can get a tan. It’s this portfolio of brands that Mr Train and his team found so attractive, that he wanted to own shares in the company. Importantly, he thinks they will be even more popular with shoppers for the foreseeable future.

What about Brexit?

Gloomy headlines will always dominate the front pages of our newspapers – it’s what sells! We’re told that between Brexit, trade wars, the future of the EU, recessions, negative interest rates and global debt, the future looks uncertain. But in truth, the wider global issues don’t really concern Nick Train. Because he is looking so far into the future, the consequences of Brexit, and many other headline-grabbing stories will seem insignificant in the long term. However, we will probably still use soap, drink fizzy drinks, and eat plenty of chocolate.

Patience is a virtue

This degree of patience is unusual amongst investment managers, but is an approach that hasn’t changed since the fund was launched 15 years ago. And the fund only holds about 25 of these companies. Nick Train admits, “there aren’t that many exceptional companies around.” Maybe it is the ultimate ‘long-term’ investment?

There are also seven more funds on the Barclays Funds List which focus on the UK, including the Majedie UK Equity Fund and the Artemis Income Fund. Find out more information on these funds.

To diversify your investment, you may like to consider our own Barclays Ready-Made Investments (RMI). The RMI are just one example of a range of diversified funds which allow you to select the level of risk you are most comfortable with. These multi-asset funds invest in passive funds across a range of asset classes and regions, offering a globally diversified one-stop solution for investors. Ready-Made Investments are not the only funds that we offer and they won’t be appropriate for everyone.

These are our current opinions but the future, as ever, is uncertain and outcomes may differ. Past performance of the fund and its manager are not a reliable indicator of their future performance.

We don’t offer personal investment advice so if you’re unsure you should seek that independently. Funds are designed for the long term so you should only consider them if you can stay invested for at least five years.

Read the Assessment of Value report [PDF, 683KB] for funds run by Barclays.