Nick Train: ‘Little sign of respite’ as Diageo and investment manager drag on value

City stockpicker Nick Train warned there was “little sign of respite” today as his London-listed investment trust reported another slump in the value of its portfolio.

Lindsell Train Investment Trust, which counts the likes of Unilever, Diageo and London Stock Exchange Group in its 13 firm portfolio, reported a 3.6 per cent slump in its net asset value in the six months to the end of September after a “long period of underperformance”.

The group’s holdings were dragged down by its 24.1 per cent stake in its own investment manager Lindsell Train Limited. Over the six month to September, LTL’s valuation fell by 11.9 per cent on the back of a slide in its funds under management from £18.6bn to £16.4bn.

In a statement today, Train said the underlying performance of its portfolio had been strong but the valuation of its holdings were proving sluggish.

“There is no consolation for shareholders when an investment strategy is stuck in a long period of underperformance, with little sign of respite. Disappointingly this is the case for all of LTL’s investment strategies, including that of [the Lindsell Train Investment Trust],” he said.

“If there is a consolation for us as the Investment Managers, it is knowing that we have not made material changes to any of our portfolios through this period.” 

Train added that the firm was “happy with the companies we are invested in” and the company “owns businesses that possess valuable brands or market positions” which will “prosper in the future”.

“[We] will be rewarded by higher share prices when they do,” he added.

The London Stock Exchange Group, the investment trust’s largest quoted holding, proved a bright spot with shares up around 16 per cent over the first nine months of 2023.

Train’s fifth largest stake in drinks giant Diageo has also been battered this year after the firm fired out a profit warning earlier this month after a slowdown in its Latin American sales. Shares in the London-listed Guinness maker are trading around 25 per cent down in the year to date.