Lindsell Train Investment Trust (LTIT) has published its results for the year to 31 March 2025. While the trust’s net asset value (NAV) total return fell by -2.2% over the period, its share price rose 9.0% as the discount to NAV narrowed significantly from 22.0% to 14.1%. This was in contrast to a 4.8% total return from its benchmark, the MSCI World Index in sterling.

Key detractors included Diageo, which fell 29%, and the trust’s significant stake in unlisted manager Lindsell Train Limited (LTL), which saw a 16% decline in value and remains the largest holding at 26.1% of net assets. NAV performance was also held back by underexposure to US tech-led equities, which have driven global benchmarks higher.

The trust’s total dividend for the year was reduced from £51.50 to £42.00 per share – a drop of 18.4% – reflecting lower revenue received from LTL, whose profits and fund flows declined amid underperformance from its strategies and additional client withdrawals. Nevertheless, the dividend yield remains a respectable 5.1%, and revenue reserves remain sufficient to support future distributions if needed.

On a five-year view, the picture is more sobering. The NAV has delivered a negative total return of -0.4% per annum since March 2021, significantly lagging the 7.4% annual inflation rate over the same period. This puts pressure on the trust’s stated aim to maintain the real purchasing power of capital.

Portfolio positioning and manager commentary

The portfolio remains highly concentrated, in line with the trust’s long-standing approach, with 15 core holdings and a notable bias toward high-quality consumer brands and intellectual property-rich businesses. Standout performers during the year included Nintendo (+25%), London Stock Exchange Group (+22%), and RELX (+15%). These holdings now account for around 45% of the quoted portfolio and are being seen as potential beneficiaries of the global shift in investor focus away from US-listed mega-cap tech stocks.

New additions to the portfolio included Thermo Fisher Scientific and Universal Music Group. Manager Nick Train emphasised the enduring appeal of durable, high-return businesses and highlighted that several of the trust’s consumer holdings have begun to show signs of renewed earnings and dividend growth. Examples include AG Barr, Heineken, and Mondelez, all of which have increased dividends by double digits.

Despite pressure from poor relative performance, Train cautioned against making abrupt portfolio changes, noting that the trust’s strategy is designed to compound value over time. He also underlined the potential for several holdings to benefit from a reappraisal of their long-term growth potential, particularly as equity markets become more volatile.

Lindsell Train Limited – key to future performance

The trust’s exposure to Lindsell Train Limited (LTL) – its unlisted investment manager – remains central to its identity but has increasingly weighed on performance. The holding fell in value from £69m to £50m, as FUM declined from £15.2bn to £11.4bn during the year. LTL continues to face headwinds, particularly from the popularity of passive strategies and five years of underperformance. It remains to be seen whether the firm can turn the corner.

The board reiterated its support for LTL’s succession strategy and highlighted that both founders – Nick Train and Michael Lindsell – remain committed to the business. Notably, the trust sold a small portion of its stake in LTL during the year to facilitate ownership transfers to the next generation of key personnel. The board views this as an investment in the long-term health of the management company.

Share split proposal and governance updates

The board has proposed a 100-for-1 share split to improve the accessibility and liquidity of the shares, particularly for retail investors. The move is subject to shareholder approval at the upcoming AGM on 11 September 2025.

Sian Hansen joined the board in June 2025, while Vivien Gould is set to retire at the AGM. Helena Vinnicombe will take over as senior independent director. The board also proposed changes to the articles of association to facilitate the share split and modernise the company’s capital structure (click here to read more on this).

Outlook and concluding thoughts

Chairman Roger Lambert and manager Nick Train both acknowledged the disappointing performance in recent years but maintained confidence in the long-term resilience of the portfolio. With the valuation of the consumer and IP-rich businesses held by the trust at multi-year lows, there is optimism that improved fundamentals – along with more favourable market sentiment – could help drive a turnaround.

The board and manager remain focused on balancing innovation and durability within the portfolio and believe the trust is well-positioned for a return to more competitive absolute and relative performance, particularly if investor appetite rotates away from US tech and toward high-quality, underappreciated global franchises.

Investors may take comfort from the trust’s sharp narrowing in discount, robust dividend yield, and the manager’s continued alignment with shareholders. However, turning around the trust’s long-term track record – particularly against its inflation-beating target – remains the key challenge ahead.

[QD comment MR: This was another difficult year for Lindsell Train Investment Trust (LTI) in NAV terms, with a total return of -2.2% once again lagging the MSCI World Index. The standout feature, however, is the narrowing of the share price discount, which helped deliver a 9.0% share price return – perhaps a signal that investors are starting to see the value of LTI’s portfolio of long-term compounders against a backdrop of increasing uncertainty and volatility.

The underperformance of its unlisted stake in Lindsell Train Limited continues to be a headwind, although some of the trust’s quoted holdings – LSEG, Nintendo and RELX – have delivered strong returns and show promise, particularly as markets begin to broaden out from US tech. Ultimately, LTI’s future performance is likely to hinge on a revival in LTL’s fortunes and a return to form across the broader portfolio. There are signs of resilience in several key holdings, but this will need to gain momentum if the trust is to re-establish its reputation for long-term wealth creation. In the meantime, he proposed share split should help improve accessibility, particularly for retail investors, and may support further narrowing of the discount.]