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Post by Fletchsmile on Jul 5, 2019 11:48:22 GMT 7
Interesting to receive an email from HL just now saying they have removed LT Global and LT UK Equity from their wealth 50 list, the reason being that both funds contain a substantial volume of HL shares. Yes. I like the service where they provide regular updates on funds, particularly where I hold them.
I guess it's reached a point with LT's investment in HL that they need to be seen to act. I think it would have made more sense for them put a rider in big bold print that LT invests in HL and let the 2 funds remain on the W50 list.
That said the funds have started to become so popular that from a personal/selfish point of view, slowing that down is no bad thing. I invested originally when they were niche managers.
Compared to closed-ended ITs it can sometimes be an advantage for a steady flow of new money coming into UTs, so they can take advantage of new opportunities without having to sell existing investments that may not yet have realised potential. On the flip side though, the open-ended structure of UTs can be a disadvantage when redemptions are high - particularly if investments are unlisted Mr.Woodford
Full article CM mentioned here:
LT's holding in HL is around 10.2%, which will be split across their various funds
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Post by Fletchsmile on Jul 5, 2019 11:49:05 GMT 7
Interesting to receive an email from HL just now saying they have removed LT Global and LT UK Equity from their wealth 50 list, the reason being that both funds contain a substantial volume of HL shares. BTW Does that mean you've finally got round to opening a UK account with them
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Post by Fletchsmile on Jul 5, 2019 11:55:45 GMT 7
Nightmare scenario: Woodford business folds > Significantly damages HL's reputation, business and share price > LT funds drop > Confidence crashes in LT and then....
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chiangmai
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Post by chiangmai on Jul 5, 2019 12:22:17 GMT 7
Interesting to receive an email from HL just now saying they have removed LT Global and LT UK Equity from their wealth 50 list, the reason being that both funds contain a substantial volume of HL shares. BTW Does that mean you've finally got round to opening a UK account with them Yes indeed, it's been up and running for nearly two months now and is doing very nicely indeed, thank you very much! I decided at the time of opening that I'd reduce my holdings in LT Global from an unnecessarily risky 17% down to 11% and fill that gap with Fundsmith, a move later validated by the (lack of) overlap article I posted and your subsequent comments - that leaves my US allocation a little higher than desired at 22% but nothing I'm going to loose sleep over. But I do like the HL platform, it is certainly feature rich and after so many years on Transact it's like being served a pint of Ruddles after drinking Archer for many years.
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Post by Fletchsmile on Jul 5, 2019 12:34:03 GMT 7
But I do like the HL platform, it is certainly feature rich and after so many years on Transact it's like being served a pint of Ruddles after drinking Archer for many years. Succintly put. Especially for us northerners
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chiangmai
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Post by chiangmai on Jul 5, 2019 12:36:39 GMT 7
Nightmare scenario: Woodford business folds > Significantly damages HL's reputation, business and share price > LT funds drop > Confidence crashes in LT and then.... Thanks Fletch, that made my morning! Since you're going to be slightly surreal lets add: ......Russia invades Europe, Trump teams up with Putin, UK becomes one big oligarch golf course and the Lake District becomes the 18th Tee....Cumberland Pelmeni becomes the national dish.
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chiangmai
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Post by chiangmai on Jul 5, 2019 14:16:15 GMT 7
Actually, that may not be a totally unrealistic scenario, in part at least. I read that HL took a large reputational and financial hit as a result of the Woodford caper which translated into a 150 mill. loss in NT's 12% holdings in HL....Blackrock also lost 85 mill. Methinks the reaction of the herd to the HL note to clients may not be what HLK intended.
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AyG
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Post by AyG on Jul 6, 2019 6:58:39 GMT 7
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Post by Fletchsmile on Jul 6, 2019 14:28:24 GMT 7
I know you're not a fan of HL. But HL can't really do much if LT wants to invest in them. That's LT's call. HL took the step to remove LT from the Wealth 50 list to demonstrate exactly that it's not an incestuous relationship. I think that was a bit over the top to be honest, but aside from that not much more HL can now do.
Lindsell Train's unit trusts are best buys on a lot of platform providers list.
LT have taken a view that HL is a good stock to hold and 8.59% of their UK fund is invested there. Nothing HL can do about that. LT have done the same thing with Schroders and 6.58% of their UK fund is there. Nothing Schroders can do either.
The thing is, because HL has the best patform around and best service + have been very successful with their business, they are now the largest player in the market. That's going to result in all sorts of links just because of being so large, and being in financial markets
As a dominant player with good long term prospectives they're attractive to many investors. LT likes to take concentrated long term bets on good brand names, so a natural holding for them.
LT Investment Trust as we know invests in the shares of Lindsell Train itself. It's been trading at a large premium, which has just kept increasing. So much good news and optimism has been built into the price. LT can't keep growing forever at the rate it has been doing. It's just been waiting for a negative catalyst.
LT Investment still trades on a premium of 43%, even after that 22% drop yesterday. Prior to yesterday the premium was over 80% !!! A price of 1952 vs NAV of 1057 really wasn't sustainable. The price of LT Investment Trust is highly speculative at those levels. Some sort of correction was inevitable at some point.
The speculation in LT is also highlighted by the fact that over 12 months the share price is up over 60.3% whereas the NAV is up only by 33.6 %. All yesterday did was adjust that down some. It's still a very high gap.
So the 12mth share price has far outstripped the growth in NAV, and that's even after yesterday's fall. That's been the pattern for years. Share price has risen 373% over 5 years compared to only 250% increase in NAV
By comparision FGT the UK IT under LT fell 0.85% yesterday which was pretty much in line/ slightly above UK markets generally. That also invests heavily in HL and Schroders, but unlike LT IT doesn't invest in Lindsell Train limited and doesn't have such a crazy speculative premium.
Bottom line LT Investment Trust is highly speculative and not a particularly good barometer of anything much at all. Except sentiment, speculation and supply and demand in LT Investment Trsut. The incestuous link is really LT investment trust's investment in its own fund manager not HL. LT Investment Trust is 46% invested in Lindsell Train Limited. But LT Investment Trust is by no means a proxy for the value of Lindsell Train Limited
(HL BTW doesn't even feature in the top 10 holdings of LT IT)
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Post by Fletchsmile on Jul 6, 2019 14:50:46 GMT 7
I thought this was an interesting point in the context of Woodford, Lindsell Train, Darwall etc
If they'd had published it earlier it would have saved me doing my own calcs on the Woodford thread about 3 weeks back ============================================================================== Going solo: the performance battle fund managers faceNick Train is the only manager to have notable success after leaving a large fund house, according to research by AJ Bell.Most big name fund managers underperform when they leave a large fund house, raising questions over whether investors should follow star investors when they go it alone. Research by AJ Bell shows that out of seven managers highlighted, only one (Nick Train) outperformed their previous record at a corporate mothership. The topic is very much in the headline. Earlier this week, it was announced that Alexander Darwell plans to launch his own investment business after 23 years at Jupiter Fund Management. citywire.co.uk/wealth-manager/news/going-solo-the-performance-battle-fund-managers-face/a1247366
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chiangmai
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Post by chiangmai on Jul 7, 2019 14:49:07 GMT 7
The timing of HL's decision to drop LT from their top 50 list was poorly judged, the media is full of columns proclaiming that HL has dropped ANOTHER fund from its lists and for many, this will be guilt by association (with Woodford). I imagine the need to do that will have resulted from increased scrutiny by the FCA of all things HL related, NT may just turn out to be collateral damage, hopefully, nothing more than a flesh wound. If it is anything more we can perhaps blame the FCA for showing up late to the party, on the wrong day, at the wrong house and wearing fancy dress for a black tie do.
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Post by Fletchsmile on Jul 8, 2019 15:25:06 GMT 7
Looks basically like LT took the opportunity to increase their shareholding in HL because of the dip in HL's share price. Seems like a shrewd move on the part of LT ======================================== Hargreaves Lansdown cuts Lindsell Train from Wealth 50Hargreaves decision comes after Lindsell Train increased its stake in the business to 12%. Hargreaves Lansdown has cut the Lindsell Train UK Equity and Global Equity funds from its Wealth 50 buy list. Hargeaves said that while it continued to have ‘high conviction’ in managers Nick Train (pictured), Michael Lindsell and James Bullock’s ability to outperform, Lindsell Train’s sizeable stake in Hargreaves Lansdown meant action needed to be taken. According to a stock exchange announcement yesterday evening, Lindsell Train bought more shares in Hargreaves on 2 July, lifting its stake to 12%. Based on yesterday’s closing price of £20.24, the stake worth around £1.2 billion. In a letter to clients, Hargreaves outlined why it had made the call: ‘We have policies and procedures to help us manage the Wealth 50 list of favourite funds. As part of this, we keep under review the proportion of Hargreaves Lansdown shares owned by a fund, or multiple funds controlled by a single manager, on the Wealth 50. ‘Given the continued popularity of the funds we anticipate the investment in Hargreaves Lansdown shares could grow further and we are therefore removing them from our favourite funds list at the end of the month in line with these procedures.’ .... citywire.co.uk/wealth-manager/news/hargreaves-lansdown-cuts-lindsell-train-from-wealth-50/a1247495?ref=wealth-manager-new-latest-news-test1-list
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88
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Post by 88 on Jul 10, 2019 15:57:51 GMT 7
What is happening with Lindsell Train? down in 2 days from 20 quid to 13.45 as of this morning. That is one hell of a sudden drop. Surely this is not all from not being included on HL's 50 best pals list? Tempting to dip a toe in the water here
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chiangmai
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Post by chiangmai on Jul 10, 2019 16:09:54 GMT 7
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88
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Post by 88 on Jul 10, 2019 16:21:43 GMT 7
Lindsell Train Investment Trust PLC symbol LTI.L
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