July Update

Lindsell Train Investment Trust PLC
11 August 2004


                     The Lindsell Train Investment Trust PLC
                                 As at 31 July 2004


Fund Objective

To maximise long-term total returns subject to the avoidance of loss of absolute 
value and with a minimum objective to maintain the real purchasing power
of Sterling capital, as measured by the annual average yield on the 2.5% 
Consolidated Loan Stock.



Share Price                                                           GBP 92.00
Net Asset Value                                                       GBP 100.93
Premium (Discount)                                                        (8.9%)
Market Capitalisation                                                 GBP 18.4mn
Benchmark (21/2% Con Ann Avg Yield +5.1%)                                   +0.4

Source: Bloomberg; NAV-Lindsell Train. Share Price
quoted is closing mid price. See Benchmark definition.




Performance History (based in GBP)                      2004 YTD       2003        2002       2001       2000
Net Asset Value %                                         +7.9         +3.0        -9.6       +3.2        n/a
Share Price %                                             +9.2         -8.6        -19.8      +18.5       n/a

Source: Bloomberg. Based in GBP. Share Price quoted is closing mid price. 
Performance years listed Jan - Dec. Launch date 22 Jan 2001. With dividends 
added back.

** Please note performance data on reports prior to June 2004 did not include 
dividends.

Past performance is not a guide to future performance. The price of units and 
the income from them may go down as well as up. Investors may not get back
what they invested.


2003 Performance   Jan 03   Feb 03   Mar 03   Apr 03   May 03   Jun 03   Jul 03  Aug 03  Sep 03  Oct 03  Nov 03  Dec 03
Net Asset Value %  -3.8      +1.9     -0.6     +1.1     +3.4     +0.5     +2.0   +1.7     -2.7    -0.5    -0.7    +0.9
Share Price %      +0.0      +0.5     +0.0     +0.0     +0.0     -2.8     -1.1   +2.2     -4.3    +2.2   -10.9    +6.1

2004 Performance   Jan 04   Feb 04   Mar 04   Apr 04   May 04   Jun 04   Jul 04   Aug 04   Sep 04   Oct 04   Nov 04   
Dec 04
Net Asset Value %                        +1.8    +3.2    +1.7    +0.8     +0.0     +2.3     -2.2
Share Price %                            -2.3    +5.9    -0.6    +0.6     +2.2     +2.7     +0.5

Source: Bloomberg. Based in GBP. Performance years listed Jan - Dec. Launch date 
22 Jan 2001. With dividends added back.
** Please note performance data on reports prior to June 2004 did not include 
dividends.

Past performance is not a guide to future performance. The price of units and 
the income from them may go down as well as up. Investors may not get back what 
they invested. 


Industry Breakdown                                                 % of NAV
Bonds                                                                  27.3
Preference Shares                                                      14.4
Equity - Media                                                          8.4
Equity - Banks & Investment Co.                                         3.8
Equity - Leisure & Ent.                                                10.2
Equity - Food & Beverage                                               26.6
Investment Fund                                                        25.2
Cash & Equivalent                                                    (15.9)
Total                                                                 100.0
Source: Lindsell Train


Top 10 Holdings                                                    % of NAV
US Gov Treasury 6.25%                                                  12.4
Lindsell Train Global Media (Dist)                                     11.5
Lindsell Train Japan (Dist)                                            10.0
HBOS 9.25% Non Cum                                                      9.7
Barr AG                                                                 8.6
Glenmorangie A&B                                                        8.5
21/2% Consolidated Loan Stock                                           8.5
Cadbury Schweppes                                                       6.6
UK Treasury 2.5%                                                        6.4
Wolverhampton & Dudley Breweries                                        5.5
Source: Lindsell Train


Fund Exposure                     Bonds          Prefs        Equity         Funds         Cash          % of NAV
UK %                              14.9           14.4          42.2           3.7         (16.0)           59.2
USA %                             12.4             -            2.1          11.5           3.2            29.2
Europe (ex UK) %                    -              -             -             -             -              -
Japan %                             -              -            4.7          10.0          (3.1)           11.6
Total                             27.3           14.4          49.0          25.2         (15.9)          100.0
Source: Lindsell Train


Fund Manager's Comments

This note is written in the immediate aftermath of the release of the US July
payroll statistics. These shocked investors, revealing an anaemic rate of job
creation and challenged, therefore, the conventional wisdom that the US and,
indeed, the World economies are engaged in a standard economic upswing. We
remain sceptical about this conventional analysis, believing that for the US and
UK economies, at least, there was never sufficient of an economic downturn
during 2001-03 to justify describing current conditions as a 'recovery'. In our
view the 'recession' that the US is purportedly recovering from is yet to come.
When it does, for the UK too, it will involve the consumer and be prolonged.

Capital markets have begun to behave in a way that confirms our view of the
world. Equities have been lacklustre through 2004, though the major markets are
decidedly down, with the exception of Japan. Meanwhile, bond markets have
recovered from the Q2 sell-off and have generated positive total returns year-
to-date, in both the US and UK. Our large holding in the 21/2% Consolidated Loan
Stock is up nearly 6.0% in price in 2004, annualising at over 15.0%, therefore,
on a total return basis.

Consciously or not, we think investors are beginning to price into assets the
way the world might look if Anglo-Saxon consumers stopped borrowing and
spending. So far as the capital markets are concerned, the primary result of
such a retrenchment would, in our view, be a further fall in inflation
expectations. Reported inflation is already very low of course, despite an
unprecedented period of consumer boom. It seems reasonable to expect it to fall
further if a consumer-led slowdown does eventually set in.

From our perspective and relative to our investment objective, we think the most
important implication for capital markets of a further decline in inflation
expectations is the continuance of the tendency for UK fixed interest assets to
deliver returns surprisingly competitive with those on UK equity. This is not a
recent phenomenon. For instance, according to the Barclays Capital Gilt/Equity
Survey, analysing data to December 31st 2003, UK equities returned 3.2% per
annum real over the previous decade. This return lags that on gilts and
corporate bonds, which returned 4.6% and 6.7% per annum respectively. Over 20
years the outcome is more 'normal', with UK equities the best performing asset
class, earning an 8.0% per annum real return. Somewhat startlingly, though, the
return on gilts over the same period was 6.1% per annum, illustrating what a
wonderful bull market they too have enjoyed since the early 1980s. The excess
return on equities over this 20-year period, of less than 2.0% per annum may or
may not justify the additional risk and volatility attendant on investing in
them. Incontrovertibly, though, the reward for taking on the additional risk
associated with equities has been dwindling. Over 104 years, from 1900, equities
outperformed gilts by an average of 4.0% per annum. For the 50 years to 2004, a
'golden era' for equity investing, the margin of outperformance averaged 5.6%
per annum. For 20 years, as we have seen, the gap is now less than 2.0% and over
the last decade equities failed to beat gilt returns.

The reason why the gap is narrowing seems simple to us. Inflation expectations
have fallen steadily over the past 20 years in the UK. This is an unalloyed good
for holders of fixed interest securities, but can bring mixed results for 'real'
assets, like equities. Put simplistically, the closer inflation rates tend
towards zero, the higher the likelihood that a given company's earnings will
fall in any year, rendering the equity asset class more risky than in a period
of rising inflation.

We do not mean to introduce an apocalyptic tone into this note. We do not
predict a global recession, deflation or financial meltdown. We do not predict a
bear market for Anglo-Saxon equity markets. Indeed, with a 3.3% net dividend
yield, we think the UK equity market looks like an attractive source of modestly
growing income. We do note, though, that most companies we meet or analyse
appear to be working extremely hard just to stand still. Think of the gargantuan
effort expended by Niall Fitzgerald and his team at Unilever in recent years,
rationalising the product range and cutting costs, all for sales growth of less
than 2.0% since 2000. We do not own Unilever for your Trust, though we can
imagine a valuation at which we would be tempted, but take it as typical of how
tough it is for companies to grow when inflation is as low as it is.
Our portfolio mix is proving reasonably resilient, with the NAV up 7.9% year-to-
date and down 2.2% in July, compared to the World Equity Index in Sterling down
2.8% and 3.3% respectively. We hope to make further progress with the NAV in H2,
with likely candidates for further capital gain being our Japan Fund, now up
16.2% in US Dollar terms in 2004 and our gilts, bonds and preference shares,
still 41.7% of the gross assets of the portfolio.


Fund Manager                Launch Date                                  Denomination
Nick Train                  22 Jan 2001                                  GBP
Year End                    Dividend                                     Benchmark
31st Mar                    Ex Date: June                                The annual average yield on the 21/2%
                            Payment: August                              Consolidated Loan Stock.
The Board                   Management Fees                              Registered Address
Rhoddy Swire                Standard Fee: 0.65%                          Lindsell Train Investment Trust
Michael Mackenzie           Performance Fee: 10% of annual increase      77A High Street
Donald Adamson              in the share price, plus dividend,           Brentwood
Michael Lindsell            above the gross annual yield of the 2        ESSEX  CM14 4RR
                            1/2% Consolidated Loan Stock.                Listing
ISIN                        Bloomberg                                    London Stock Exchange
GB0031977944                LTI LN                                       

Disclaimer

This document is intended for use by persons who are authorised by the UK
Financial Services Authority ('FSA') and those who are permitted to receive such
information in the UK. The information contained in this document does not
constitute an offer or invitation to buy or sell any investments. Nothing in
this document constitutes investment, legal, tax or other advice. Lindsell Train
and/or persons connected with it may have an interest in this investment.

The value of any investment in securities or funds and the income generated from
them may go down as well as up and are not guaranteed. Past performance cannot
be used as a guide or guarantee of future performance. You may not get back the
original amount you have invested. Changes in foreign exchange rates may cause
the value of your investment to go up or down. Some funds with higher gearing
may be subject to higher volatility and the investment value may change
substantially. The net asset value (NAV) performance of an investment trust is
not the same as its market share price performance.

Issued by Lindsell Train Limited
Authorised and regulated by the Financial Services Authority
11 Aug 2004 LTL 000-018-6b


                            Lindsell Train Limited
                       35 Thurloe Street, London  SW7 2LQ
                 Tel. [phone]  Fax. [phone]
                 [e-mail]  www.lindselltrain.com

           Lindsell Train Limited is authorised and regulated by the 
                        Financial Services Authority.


                      This information is provided by RNS
            The company news service from the London Stock Exchange