Architas adds Lindsell Train as it cuts small caps

Nathan_Sweeney_ArchitasArchitas has added the Lindsell Train UK equity fund to its multi-asset fund.

Nathan Sweeney, senior investment manager at Architas, has cut small and mid-cap equity exposure in the Multi-Asset Active fund range in favour of adding the £1.9bn CF Lindsell Train UK Equity Fund.

“We believe we are in a period of sustained low growth, which is a challenge for managers who have a value approach. You can see this over the past few years as funds with a focus on growth, and companies delivering a stable income, have been rewarded by the market place and investors,” he says.

However, he believes managers that take a fundamental look at investments, buying at a good price and holding it for the long term have the potential to benefit in the current environment.

“Co-managers Nick Train and Michael Lindsell have a style of management that has potential to be rewarded in era of persistent low growth where central banks have tried and ultimately failed to stimulate demand.

“They have a concentrated portfolio with very little turnover, which has served them well in terms of performance in recent years. Their focus on strong brands with significant pricing power can be seen in the latest addition to the portfolio of Remy Cointreau, which was added in 2015,” he says.

The Lindsell Train UK Equity fund delivered 11.5 per cent over 2015, compared to a 1 per cent gain from the FTSE All Share. In 2014 the fund returned 7.3 per cent on the All Share’s 1.2 per cent return.

Sweeney says he has cut small and mid-cap stocks ahead of the EU referendum, but thinks a potential Brexit could throw up investment opportunities, “depending on the result”.