Nick Train takes home £19m dividend as his investors nurse losses

Star fund manager Nick Train paid himself an estimated £19m dividend last year despite his funds returning less than the stock market.

Mr Train and his business partner Michael Lindsell, together with their spouses, split an estimated £38m in the year to January 2022, according to Companies House filings for their firm Lindsell Train, based on the share split at the end of March 2022.

Savers have more than £11bn invested in the duo’s funds which charge between 0.72pc and 0.64pc per year. However, none returned more than their benchmarks in the same period.

Their flagship £5.9bn Lindsell Train Global Equity fund lost investors 2pc in the 12 months to Jan 31, despite global stock markets rising 19pc.

Mr Train’s £4.9bn UK Equity fund, which buys British stocks, returned just 6pc while the domestic market rose 18pc. Meanwhile, the Lindsell Train North American fund returned 15pc, 5 percentage points behind the S&P 500, a US stock market index.

Despite the funds' poor performance, Mr Train and Mr Lindsell’s bumper payout was funded by strong pre-tax profits for the business, which grew 5pc to £81m. The Lindsell Train funds' have continued their weak returns this year, with all but one posting losses as stock markets sell off around the world.

Mr Lindsell’s Japanese Equity fund has grown by 2pc, however. Robin Powell, a consumer advocate, said most DIY investors would be better off in cheaper, passive funds that simply track the stock market rather than trying to beat it.

He added that savers should be wary of fund managers that are hailed as “star” investors.

He said: “Nick Train has performed poorly and his funds are not cheap. They tend to favour small, heavily concentrated portfolios which bring a lot of risk. The UK Equity fund has just 20 stocks.

"They like to stick with their chosen strategy and keep the fund’s turnover low. But concentration and conviction cut both ways; you have real potential to outperform if you are right, but can come badly unstick if you are not.”

Almost all fund managers that specialise in large or medium sized British companies have not returned more than the market average in the first six months of 2022, according to a report from S&P Global, a data provider.

Mr Powell added: “Savers would expect these professional investors to deliver higher returns because they are taking on more risk. But that is rarely the case.”

Lindsell Train was contacted for comment.