Nick Train: how investors should navigate Covid's winners and losers
The challenge facing investors, says fund manager Nick Train, is that this year’s winners have priced in a lot of optimism, but relief for depressed stocks may be some way off.
Nick Train is one of the UK’s most successful fund managers. His strategy boils down to buying good companies with high-quality brands, holding for the long run and – famously – spending as little time as possible worrying about the wider economy. However, the Covid-19 lockdown has been hard to ignore and in his commentary to the half-year results of the Lindsell Train investment trust (which has climbed by more than 600% over the past decade), he gives his views on prospects for his holdings in a post-coronavirus world.
Companies with a “digital growth story” have actively benefited from lockdown, notes Train, with payments processor PayPal and video-games giant Nintendo among the trust’s biggest gainers this year. However, the drinks industry – another of Train’s favoured sectors – has lagged. In other financial shocks “drinks companies have earned a reputation for being ‘defensive’”. But this time the likes of Heineken have suffered as pubs and restaurants have shut and people have socialised less.
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