Lindsell Train Global Equity is one of the most popular global equity funds in the UK. It’s not hard to see why. Since its launch in 2011, it’s delivered a return of around 380% for investors, beating the market by a wide margin.
For many years, Lindsell Train Global Equity has been a core holding for me. However, I recently decided to sell out of the fund. Here, I’ll explain why. I’ll also discuss where I reinvested the proceeds of the sale.
The 3 reasons I sold Lindsell Train Global Equity
The first reason is that since I invested in it back in 2013, I’ve built up substantial positions in many of the stocks it holds, such as Diageo, Unilever, and London Stock Exchange. So there was a fair bit of overlap between the fund and my stock holdings.
The second reason is that the fund has a very high level of exposure to the Consumer Staples sector (43% at the end of August). I do like this sector as a whole, but it’s not the sector I’m most bullish on from a long-term point of view. I’m more drawn to the technology sector and Lindsell Train Global Equity has a lighter allocation to this sector.
Finally, the fund’s performance has been a little disappointing recently. Indeed, over the last three years, the fund’s underperformed its benchmark. This comes back to the lack of technology exposure. Not owning large-cap tech stocks such as Microsoft, Apple, and Alphabet has hurt performance.
I’ll point out that I still believe Lindsell Train Global Equity is an excellent fund. I really like portfolio manager Nick Train’s long-term, buy-and-hold approach. However, after looking at my portfolio as a whole, I decided the fund was no longer the best option for me.
Where I invested the money
After selling the fund, I reinvested the proceeds into two funds, with the majority (80%) going into the Sanlam Artificial Intelligence fund. The reason is I expect the artificial intelligence (AI) industry to experience tremendous growth over the next decade and I want to have portfolio exposure.
This fund provides me with exposure to the theme with stocks such as Globant, Upstart, and Keyence, which are all active in the AI space. I like the fact that performance here has been very strong in recent years (three-year return of more than 100%) and fees are very reasonable (0.52% per year through Hargreaves Lansdown).
This fund’s a much higher risk than Lindsell Train Global Equity, but I’m comfortable with this.
I then used the remaining 20% to top up my holding in the Threadneedle European Select fund. The reason I added to this fund is that I see it as a good portfolio diversifier. And I really like some of the holdings such as ASML, LVMH, and Pernod-Ricard.
Again, this fund is higher risk than Lindsell Train Global Equity because it’s purely focused on Europe. However, its performance track record is solid.
After this switch, I now own five funds in my ISAs and SIPP. They are:
Blue Whale Growth
Sanlam Artificial Intelligence
Threadneedle European Select
Polar Capital Global Technology
I feel these funds will be able to grow my wealth over the long term.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Edward Sheldon owns shares of Alphabet (C shares), Apple, Diageo, Hargreaves Lansdown, London Stock Exchange Group, Microsoft, and Unilever and has positions in Fundsmith Equity, Blue Whale Growth, Sanlam Artificial Intelligence fund, Threadneedle European Select fund, and the Polar Capital Global Technology fund. The Motley Fool UK owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), Apple, Microsoft, and Upstart Holdings, Inc. The Motley Fool UK has recommended ASML Holding, Diageo, Hargreaves Lansdown, and Unilever and has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.