Rated Fund 2014-2017. Investing in quality brands for the long term
This trust is a good long-term hold and was highly commended in the UK Equity category in Money Observer's 2015 awards. As its name suggests, it is not purely income-oriented, so its yield is a modest 2 per cent although its dividends have grown by 6 per cent a year on average for the past five years.
It has been managed since 2000 by Nick Train, whose philosophy is to invest mainly in high-quality UK but also some overseas companies, which own both durable and cash-generative brands that are under-priced on his valuation analysis.
He runs a concentrated portfolio of around 30 stocks and his long-term approach means that turnover is extremely low. He does not take general economic and political developments into account as he says they eventually wash through.
At the same time he concedes that macroeconomic concerns can throw up useful opportunities, and it was as a result of such volatility that in early 2016 he made his first new share purchase for the trust for several years. He added a stake in Remy Cointreau whose share price had suffered as a result of the slowdown in China, where it is very popular.
His main concern is looking at how much confidence companies have in the future, which he thinks can partly be judged by the volume of takeover activity going on. His main reason for selling shares is when he loses confidence in the company or a brand's potential for future growth, or when valuations become excessive.