Lindsell Train Global Equity Fund Managers On Why They Did Not Sell A Single Stock In 2017

In the monthly report for December, the manager highlighted a good year for the fund, which was up 26% and outperformed its benchmark the MSCI World Index (developed markets) by 14%, with the latter returning 11.8% over the same period according to the group.

Bullock attributed this to strong performance from its companies, 17 of which (out of 27) contributed total local currency returns of over 25%.  

He said: "We are sometimes accused of 'loving' our stocks; possibly with good reason given we did not exit a single name over the year. To be honest though 2017 has made loving the fund's companies easy and most have returned the sentiment with generous gusto."

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The best-performing names include PayPal, Shiseido, Nintendo and Celtic, which exceeded 70%, and Juventus, which more than doubled.

But Bullock noted performance of the fund has not always been as good and in that regard, could not provide any expectations for 2018 despite feeling positive about the vehicle's holdings.

He added: "In the interests of temperance, remember that on a one-year view performance can be (and has been; in 2016 we underperformed by -3.7%) lumpy.

"We certainly have no precise expectations for 2018. Nevertheless we still view our holdings as having excellent underlying prospects and still think them undervalued by others."

Unilever continues to be one of the team's favourite holdings, representing over 8% of the portfolio, and remains one of the group's best examples of their long-term approach.

"20 years ago Unilever was priced at 17x its earnings, a similar multiple to the MSCI World index, which it went on to outperform by nearly three times driven almost entirely by its exceptional dividend growth," Bullock said.

"As at December 2017, it is trading at just under 19x 2018's estimated earnings, a mere 10% premium to the market's around  17x.

"If Unilever's underlying business can come even close to matching its past record then this extra 10% we're asked to pay against the average company will seem absurdly small two decades from now."

Over three years to 12 January, the fund is up 85%, outperforming both the MSCI World index (+53%) and the Investment Association's Global sector average return (+47%) during the same period, according to FE.