Following an extensive review of the LF Lindsell Train UK Equity fund, we have taken the difficult decision to downgrade the fund’s rating from AAA to A; an action we feel is appropriate because of our increasing concerns over the fund’s liquidity profile.
Over the past few years, the fund has delivered strong performance both in absolute terms and versus its benchmark, the FTSE All Share index. This has undoubtedly led to the strategy attracting a large body of assets following an investment approach that results in a low turnover and highly concentrated portfolio. Given the current liquidity levels within the underlying stocks held, we believe there could be significant issues should the fund experience a prolonged period of and/or a sizeable level of redemptions.
We would like to highlight that the fund has consistently met its performance objective and we retain conviction in the manager’s ability to continue to deliver this over the long term. However, given our concerns around the fund’s current liquidity profile, we felt it prudent to lower its rating. We will continue to monitor the situation closely and take any further steps we feel necessary. Updates will be provided accordingly.
Currently rated by 5 people