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Stock Analysis & ValuationLindsell Train Investment Trust Plc (LTI.L)

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£6.36
Sector Valuation Confidence Level
High
Valuation methodValue, £Upside, %
Artificial intelligence (AI)49.35676
Intrinsic value (DCF)3.15-50
Graham-Dodd Method0.66-90
Graham Formula34.21438

Strategic Investment Analysis

Company Overview

Lindsell Train Investment Trust Plc (LTI.L) is a UK-based closed-ended balanced mutual fund managed by Lindsell Train Limited. The trust invests globally across public equity and fixed income markets, targeting diversified sectors through equities, unquoted equities, bonds, and other Lindsell Train-managed funds. With a benchmark against the 2.5% Consolidated Loan Stock and MSCI World Index, the trust emphasizes long-term capital growth and income generation. Established in 2001, LTI.L is a niche player in the asset management sector, leveraging the expertise of its parent firm to deliver consistent returns. Its portfolio includes strategic allocations to high-quality, undervalued securities, making it an attractive option for investors seeking exposure to global markets with a disciplined investment approach. The trust’s focus on unquoted equities and proprietary fund products differentiates it from conventional investment trusts, offering unique diversification benefits.

Investment Summary

Lindsell Train Investment Trust Plc presents a compelling investment case due to its disciplined, long-term investment strategy and strong performance track record. With a beta of 0.622, the trust exhibits lower volatility compared to broader markets, appealing to risk-averse investors. The trust’s diversified portfolio, including unquoted equities and proprietary funds, provides unique exposure to high-growth opportunities. However, its reliance on Lindsell Train’s management introduces key-person risk, and the closed-ended structure may limit liquidity. The trust’s dividend yield, supported by a £51.5 per share payout, enhances its attractiveness for income-focused investors. While the absence of debt and a healthy cash position (£6.03 million) underscore financial stability, the concentrated portfolio could pose risks if key holdings underperform. Overall, LTI.L is suited for investors seeking a conservative, globally diversified fund with a proven management team.

Competitive Analysis

Lindsell Train Investment Trust Plc (LTI.L) distinguishes itself through its unique investment strategy, blending exposure to public equities, unquoted securities, and proprietary funds. Unlike traditional asset managers, LTI.L benefits from Lindsell Train’s concentrated, high-conviction approach, which prioritizes quality and long-term growth over short-term market trends. This strategy has historically delivered strong risk-adjusted returns, as evidenced by its low beta (0.622). However, the trust’s niche focus on unquoted equities introduces illiquidity risks, and its performance is heavily tied to Lindsell Train’s investment acumen. Competitively, LTI.L operates in a crowded asset management sector dominated by larger, more diversified players. Its smaller size (£165.8 million market cap) limits economies of scale but allows for agility in portfolio adjustments. The trust’s benchmark-agnostic approach contrasts with passive funds, offering active management appeal. While its fee structure and performance justify its premium for some investors, the lack of debt and reliance on a single management team could deter those seeking broader diversification or lower-cost alternatives.

Major Competitors

  • Scottish Mortgage Investment Trust Plc (SMT.L): Scottish Mortgage (SMT.L) is a larger, more growth-oriented investment trust with significant exposure to global tech and unlisted equities. Its aggressive growth strategy contrasts with LTI.L’s balanced approach, offering higher potential returns but greater volatility. SMT.L’s scale provides better liquidity, but its recent underperformance in tech downturns highlights sector concentration risks.
  • F&C Investment Trust Plc (FCIT.L): F&C Investment Trust (FCIT.L) is one of the oldest and largest global investment trusts, with a diversified portfolio across equities and fixed income. Its long-term track record and lower fees make it a strong competitor, though its passive-heavy strategy lacks LTI.L’s active, high-conviction approach. FCIT.L’s size enhances liquidity but may limit agility in shifting allocations.
  • Witan Investment Trust Plc (WTAN.L): Witan (WTAN.L) employs a multi-manager approach, diversifying across external fund managers. This contrasts with LTI.L’s reliance on Lindsell Train, offering broader expertise but potentially diluted performance. WTAN.L’s lower expense ratio and consistent dividends appeal to cost-conscious investors, though its returns may lack the upside of LTI.L’s concentrated bets.
  • Bankers Investment Trust Plc (BNKR.L): Bankers (BNKR.L) focuses on global growth and income, with a dividend growth streak rivaling LTI.L’s. Its larger portfolio provides diversification but may lack LTI.L’s strategic focus on unquoted equities. BNKR.L’s lower volatility and consistent performance make it a stable alternative, though its returns may trail LTI.L in bullish markets.
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