Interactive Investor

ii Super 60 Lindsell Train Japanese Equity under formal review

9th November 2021 12:10

Jemma Jackson from interactive investor

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The fund has been put under formal review owing to performance concerns.

Interactive investor, the UK’s second-largest DIY investment platform for private investors, has placed Super 60-rated Lindsell Train Japanese Equity fund under formal review due to performance concerns.

Dzmitry Lipski, Head of Funds Research, interactive investor, says: “While this fund has outperformed over long time periods, it has significantly lagged its benchmark and peers over the shorter term. Its underperformance is particularly notable since last November’s vaccine announcements, which proved to be the catalyst for value shares to outperform growth shares for a number of months. This proved to be a headwind for Lindsell Train Japanese Equity, as it invests in high-quality growth companies.

“The short-term underperformance has negatively impacted its three-year performance numbers, and with this in mind interactive investor’s fund analyst team believe it is prudent to take a closer look at the fund’s performance.

“As part of the formal review process, we will examine the team and the investment process, detractors for performance, current portfolio positioning and outlook for the fund.  

“interactive investor’s Investment Selection Committee will decide to either retain or replace the fund within the Super 60 listing. Our goal is to reach a decision within three months of the date when the investment was placed under formal review. This gives us enough time to discuss our concern with the relevant fund manager and/or allow an opportunity for improvement.”

Background

The fund is managed by Michael Lindsell, who has been covering Japanese equities since 1985. The manager invests in high-quality companies with durable, cash-generative business franchises through a portfolio of 20 to 30 best stock ideas. He has successfully and consistently applied his approach for many years and delivered strong performance over the longer term.

The fund’s performance is compared with the TOPIX index but is not constrained by the benchmark and will take positions in individual stocks that differ significantly from the index with the aim of achieving a return in excess of the benchmark.

ii have recommend the fund for long-term investors looking for growth in Japanese equities but who can tolerate short-term volatility and also acknowledge that due to the manager bias to high-quality companies, the fund could underperform in strongly rising markets.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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