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Train hails 'spectacular' Schroders and Hargreaves return

Nick Train hails 'spectacular' returns in April for Hargreaves Lansdown and Schroders after significantly upping his stakes.

Train hails 'spectacular' Schroders and Hargreaves return

Nick Train has hailed a 'spectacular month' for his holdings in Hargreaves Lansdown, Schroders and Rathbone Brothers as the star fund manager reaped a swift reward for significantly upping his stakes in the businesses.

Citywire AA-rated Train has been building his exposure the the former two in recent months, with Lindsell Train fund group's ownership of Hargreaves Lansdown rising above 11% of the shares in April, the same month its holding in Schroders reached 10%.

Both are top 10 holdings in his £6.8 billion Lindsell Train UK Equity fund, accounting for 8.9% and 7.3% of the portfolio respectively.

Train said in his latest update to investors in the fund that April had proved 'a rather spectacular month'.

'After sentiment had gradually improved toward the UK through the first few months of 2019 - temporarily or otherwise - shares in UK financial companies suddenly rallied strongly,' he added.

Train highlighted double-digit gains for all three of his asset management holdings singling out Hargreaves, the best performer in the portfolio last month.

'That move was enough to take Hargreaves Lansdown to an all-time high, pushing beyond its September 2018 peak,' he said.

While the manager responded to falls in the shares of both Hargreaves and Schroders amid last year's stock market sell-off by buying more, he said this was due to their long-term potential rather than a quick trading opportunity.

'It is important to remind our investors that we do not trade our holdings in these fund management companies,' he said.

'We never buy them on the basis that we "fancy" the market for the next few months and we certainly don't sell them because we are nervous in the short term.'

Train pointed to the attractive 'business economics' of fund management companies, highlighting the operating margins of 'well over 20% or higher' of the three stocks.

'In addition we invest in this industry because we are long-term optimists about global stock markets and global wealth creation. Finding "proxy" investments that allow us to participate in this tendency for wealth to compound worldwide strikes us as sensible,' he said.

Lindsell Train UK Equity has returned 54.6% over three years, placing the fund sixth of 229 in the Investment Association's UK All Companies sector.

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Nick Train
Nick Train Average Total Return:
53.77%
3/165 in Equity - UK (All Companies) (Performance over 3 years)
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