Lindsell Train UK Equity: January 2026 fund update

• Nick Train aims to invest in successful companies that have stood the test of time

• He’s a long-term investor, and makes very few changes to the fund from year to year

• Train has a strong long-term record, with the fund outperforming the FTSE All Share index since launch, though performance has been weaker in recent years

• This fund does not feature on our Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

The Lindsell Train UK Equity fund aims to deliver long-term growth by investing in a small number of high-quality UK companies that generate lots of cash and have stood the test of time. Most of the fund is made up of large well-established companies that have strong brands or powerful market franchises.

The fund could be an option for the UK part of a broader global investment portfolio. A focus on large, high-quality companies means it could work well alongside other funds investing in unloved UK companies with recovery potential, or those focused on smaller companies.

Manager

The fund was set up in 2006 by Nick Train, who has more than four decades of investment experience. Train was previously Head of Global Equities at M&G Investment Management, and before that he spent 17 years at GT Management in various senior roles including Investment Director and Chief Investment Officer for Pan-Europe.

Train is also co-manager of the Lindsell Train Global Equity fund and lead manager of two investment trusts. He focuses on the UK companies of the global fund, so given the high degree of coverage overlap between the four funds, and the fact they all use a similar investment process, we think this is a reasonable workload.

Train is supported by deputy portfolio manager Madeline Wright who joined the business in 2012. He also has the support of an experienced and highly regarded team, including fellow co-founder Michael Lindsell.

Process

Train invests mostly in large, longstanding businesses with characteristics that are hard to copy, such as strong brands, heritage or sports franchises. His search for high-quality businesses tends to lead him towards larger companies, although he has the freedom to invest in UK companies of any size if he spots an opportunity. This includes smaller companies, which are higher risk than their larger counterparts.

Train is a long-term investor and analyses companies with a time horizon of a decade or longer in mind. This buy and hold approach means he makes few changes to the fund year on year.

Historically the fund has been dominated by consumer brands but in recent years Train has invested more in what he describes as ‘digital winners’ – companies with market leading data sets and the potential to benefit from advancements in artificial intelligence (AI). This includes data and analytics business RELX and information services company Experian. This theme is a core part of the fund, with ‘digital winners’ making up 60%. Over the past year, the managers added an investment in Auto Trader Group, the UK’s largest digital automotive marketplace.

While the fund has evolved, consumer companies still make up 30%, though this is down from 48% in 2019. Well-known brand owners such as Unilever and Diageo remain large investments in the fund, but Train has sold non-UK consumer companies including international brewer Heineken. It now invests solely in UK-listed businesses, compared to investing 19% in non-UK companies in 2019 (like all UK funds, this one can invest up to 20% in overseas firms). This reflects Train’s view that the UK stock market is attractively valued compared to international peers.

The fund typically invests in 20-30 companies. Investing in a relatively small number of companies means each investment can have a big impact on overall returns, which is a higher-risk approach. Following the sale of the non-UK listed companies, the fund is now more concentrated than usual, with 19 investments.

Culture

Between them, Michael Lindsell and Nick Train own the majority of Lindsell Train Limited, the company that runs all Lindsell Train funds. We view this positively as ownership of the business ties the managers’ long-term incentives to the interests of investors.

The duo and their team spend lots of their time reading, learning and compiling information on companies they own shares in and those on their watchlist. They tend not to recruit experienced people, preferring to train and develop graduates who can be moulded into the Lindsell Train way of thinking.

Our due diligence on the Lindsell Train business previously highlighted some areas for improvement in the firm's corporate governance processes. We are pleased to report that the firm has made enhancements to their risk management processes, and we are now satisfied they have robust governance oversight in place.

ESG Integration

All Lindsell Train funds seek to invest in exceptional companies for the long term. These companies tend to be well-managed with responsible business practices. Lindsell Train fund managers avoid capital intensive industries (such as energy, commodities and mining companies) and those judged to be sufficiently detrimental to society that they might be vulnerable to burdensome regulation or litigation (such as tobacco, gambling and arms manufacturers).

Fund managers are responsible for voting and engagement. Their long-term approach means they are generally supportive of company management teams. If the fund managers disagree with the management team’s approach, they will try to influence the company to adopt a different course of action if it’s in clients’ interests. Voting and engagement case studies are available in the firm’s annual Stewardship Report and its ESG & Engagement Report.

Cost

This fund has an ongoing annual fund charge of 0.66%, but a discount of 0.15% is available for HL investors, which reduces the charge to 0.51%. The HL account charge of up to 0.45% per year also applies, except in the HL Junior ISA, where no account charge applies. Please note that charges are taken from capital, which could boost the income, but reduces potential for capital growth.

Performance

The fund has performed well since its launch in July 2006, delivering returns greater than the FTSE All Share Index. Over this period, the fund has gained 391.38%*, ahead of the FTSE All Share’s 258.45% return. Past performance should not be viewed as a guide to future returns.

Train’s focus on high-quality companies has helped shelter investors' money to a degree when markets have fallen but we expect the fund to lag the broader market when it rises quickly.

While the fund’s long-term track record remains strong, the last five years have been challenging. The past year has been particularly disappointing, with the fund losing 7.11%, lagging the 24.02% return delivered by the FTSE All Share Index.

This is partly because the fund’s quality-focused investment style has been out of favour, which has also impacted others that invest in a similar way. Over the past year, UK funds with a value focus have performed better. Most of the UK stock market’s gains have been driven by industries like aerospace & defence and banks which aren’t areas that this fund usually invests in.

The manager’s stock selection has also hurt performance. Our analysis suggests that financial markets infrastructure provider London Stock Exchange Group and alcoholic beverage company Diageo were the biggest detractors. Train continues to see long-term opportunities in these businesses.

Over the longer term, we expect the fund to do better when quality investing is in favour. If the recent trend reverses, it should outperform valued-focused funds, though this isn’t guaranteed. Investment styles go in and out of favour, which is why we suggest investors build diversified portfolios with exposure to a variety of styles, sectors, countries and asset classes.

Because the fund is concentrated, its performance can differ meaningfully from the broader market, both positively and negatively. This approach has delivered strong periods of performance in the past, but this won’t always be the case as we’ve seen over the last year. The fund isn’t currently on the Wealth Shortlist. Performance has disappointed in recent years and we’re mindful of the concentrated approach, which is more extreme than usual, and the impact this has had, and can have, on performance.