Monthly Update 31 May 2003

Lindsell Train Investment Trust PLC
16 June 2003

The Lindsell Train Investment Trust PLC
As at 31st May 2003

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.

Net Asset Value                        GBP 95.03
Share Price                            GBP 95.50
Premium (Discount)                          0.5%
Market Capitalisation                 GBP 19.1mn

Source: Bloomberg; NAV - LTL
Performance (based in GBP)         May        Apr       Mar        YTD        Since Launch
NAV                               +3.4%      +1.1%     -0.6%      +1.8%          -5.0%
Share Price                       +0.0%      +0.0%     +0.0%      +0.5%          -4.5%

Source: Bloomberg. Based in GBP.

Top 10 Holdings                        % NAV                 Industry Breakdown                     % NAV
US Gov Treasury 6.25%                  16.1                  Bonds                                  37.6
Lindsell Train Japan (Dist)            12.3                  Preference Shares                      13.1
Lindsell Train Global Media (Dist)     10.3                  Equity - Media                          8.4
21/2% Consolidated Loan Stock           8.2                  Equity - Banks & Investment Co.         4.7
HBOS 9.25% Non Cum                      7.9                  Equity - Leisure & Entertainment        7.8
US Gov Treasury IL 3.875%               7.4                  Equity - Food & Beverage               19.6
Barr AG                                 6.9                  Investment Fund                        22.6
Glenmorangie plc A&B                    6.2                  Cash & Equivalent                     (13.8)
UK Treasury 2.5%                        5.9                  Total                                  100.0
Cadbury Schweppes                       5.5

Geographical Breakdown                   % NAV              Currency Exposure                    % NAV
Bonds                                    37.6               USD                                   53.3
                 UK              14.1                       JPY                                  (0.1)
                 US              23.5                       EUR                                   0.0
Preference                               13.1               GBP                                   46.8
Shares                                   40.5               Total                                100.0
Equities         UK              30.4
                 US               4.8
                 Japan            3.4
                 Europe           1.9
                                         22.6
Funds            LT Japan        12.3
                 LT Global Media 10.3
                                        (13.8)
Cash &
Equivalent
Total                                    100.0



Fund Manager's Comments

As always, the Berkshire Hathaway AGM, every May, provides enlightenment and
amusement. Buffett and Munger remain witty, extraordinarily generous with their
ideas and, above all, right about damn near everything. We report a number of
their apercus that strike us as particularly relevant for the Lindsell Train
Investment Trust and its managers.
For instance, we were reminded of why we established Lindsell Train Limited by
Munger's comments about the investment management industry - 'The general
systems of money management today require people to pretend to do something they
can't do and like something they don't. It's a terrible way to spend your life,
but its very well paid.' Our quality of professional life has improved since we
renounced such pretensions. Asked later from the floor what qualities make a
successful investor, Munger remarked - 'I think there's something to be said for
developing the disposition to own stocks without fretting.' Sound advice and the
present author must work harder on his disposition.

At the strategic level, there is harmony between what Buffett/Munger say and do.
It is clear that neither of them regard equity, as an asset class, as
attractive, despite a halving of the S&P 500. Buffett reiterated his expectation
of 5-7.0% per annum total returns as being the best that can be hoped from
stocks in the foreseeable future, Munger regards even this as optimistic. Their
caution is confirmed by the $16.0bn cash on Berkshire's balance sheet, earning
only 0.75% - 'which does not make us salivate. But we'd rather avoid salivation
than have problems.' Moreover, their recent investment activity resembles that
of a venture capitalist or even a vulture fund, rather than that of a public
market participant. Specifically, Berkshire has been acquiring outright whole
companies, sometimes from private vendors or, with Burlington, a textile
company, from the receivers. There are two signifiers of strategy here. First
Berkshire is not, apparently, accumulating stakes in publicly quoted companies,
as was the primary feature of its business for the last 20 years - this
reflects, presumably, lack of value available. Second, the types of business
Berkshire is acquiring are not traditional 'Buffett' companies, as we would
understand such a thing. Far from buying cash generative, high barrier to entry
consumer or media franchises, the recent deals have been for more capital
intensive assets, where access to capital can be a competitive advantage, like
insurance, homebuilding and energy. One of our cleverest shareholders, a keen
Buffett-watcher, argues that Berkshire is embarking on a third phase of its
history, from a buyer of portions of beaten down 'value' stocks in the 1960's
and 1970's, to a buyer of portions of 'quality growth' stocks in the 1980's and
1990's to, today, being a buyer of whole businesses where Berkshire's management
skills and, crucially, its capital can bring benefits to the acquired company.

Our particular interest in this relates to the assumption we share with Buffett,
that stocks will deliver lower nominal returns in a period of low inflation and
the related assumption, that we guess Buffett would not approve of, that long
dated bonds offer total return prospects at least as good as equities, but with
less risk. We added to our irredeemable gilts last month, as the 'deflation'
debate took grip of the investment community. We are not committed
deflationists, but are sure that the more deflation is feared, the greater the
value of fixed, certain long term income, with 'irredeemability' becoming an
increasingly sought after characteristic. On the same theme, we switched some of
our holding in the Halifax 6 1/8% preference stock into shares of the HBOS 91/4
%. The reason being not only a higher yield, with an identical credit risk, but
also the fact that the latter instrument is irredeemable, while the former could
be called in 2024.

The extent of our exposure to HBOS, maintained at 15%, even after a sale of some
of the ordinary shares, makes Buffett's comments about the banking industry at
the AGM especially interesting. He says - 'If you can just stay away from
following the fads and making bad loans, (banking) has been a remarkably good
business. Since World War II, ROE for banks that have stayed out of trouble has
been good. Some large, well-run banks earn 20.0% ROE. I've been surprised that
margins in banking have not been competed away.' We think that the resilience of
banking returns is in some part attributable to trust, hard to win, easy to
lose. Halifax has one of the most trusted brands in Britain, let alone the
financial services industry and this trust lends terrific predictability to its
returns and, we hope, terrific predictability to its preference dividends.

Buffett raised an uncomfortable issue for us when he noted - 'There aren't many
examples of companies that lose then regain competitive advantage.' He
challenged his audience to come up with examples of such recoveries and it is
true, we can think of few. Perhaps Marks and Spencer over the past two years,
although the company would probably dispute it had ever lost competitive
advantage. We own two shares in particular where other investors seem convinced
that competitive advantage has been lost for good, Nintendo and Reuters. At
least the doubling in Reuters' shares since the March low has brought some
respite and support for our contention that the company's problems are cyclical
not secular. Elsewhere, when asked what research the two rely on, Munger
highlighted Annual Reports and business periodicals, adding - 'I'd hate to give
up the Wall Street Journal.' As shareholders in Dow Jones we were pleased by
this plug and are pleased too by the sight of its colour advertising growing at
double digit pace, even before a general recovery in WSJ advertising. The
combination of more colour pagination and a much reduced cost base means that
this unique franchise should be even more profitable than before, once capital
market and M&A volumes recover, as they show signs of today.

Two final snippets, aimed at putting business and life into perspective. Buffett
- 'The way to get a reputation for being a good businessman is to buy a good
business.' Munger - 'I can't imagine people who aren't loved feel very
successful.'



Fund Manager                   Launch Date                             Denominated Currency
Nick Train                     22 January 2001                         GBP


Year End                       Dividend                                Benchmark
31st March                     Ex-date:   June                         The annual average yield
                               Payment:   August                       on the 21/2% Consolidated
                                                                       Loan Stock.


The Board                      Management Fees                         Registered Address
Rhoddy Swire                   Standard Fee: 0.65% p.a.                Lindsell Train Investment
Michael Mackenzie              Performance Fee: 10% of annual          Trust
Donald Adamson                 increase in the share price, plus       77A High Street
Michael Lindsell               dividend,                               Brentwood
                               above the gross annual yield of         ESSEX  DM14 4RR
                               the 21/2% Consolidated Loan Stock.


Sedol No                       Bloomberg
3197794                        LTI LN



















Disclaimer
The contents in this document is solely for information purposes only. The
information contained herein does not constitute an offer or invitation to buy
or subscribe any securities or funds in any jurisdiction in which such
distribution is not authorised. Nothing in this document constitutes investment,
legal, tax or other advice and cannot be relied upon in making any investment
decision. Applications to invest in some of the funds must only be made on the
basis of offer documents which may only be available for private circulation.
The information contained in this document is published in good faith and
neither Lindsell Train Limited nor any other person so connected assumes any
responsibility for the accuracy or completeness of such information as provided.
No representation is made or assurance given that any statements made, views,
projections or forecasts are correct or that objectives will be achieved.
Lindsell Train and/or persons connected with it may have an interest in the
Fund.  The value of investments and the income from them may go down as well as
up and are not guaranteed. Past performance is no guarantee of future
performance. You may not get back the amount you invested. Foreign exchange
rates may cause the value of investments to go up or down. Investments may be
subject to higher volatility in certain funds and the investment value may fall
suddenly and substantially.

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

                Lindsell Train Limited is regulated by the FSA.

--------------------------------------------------------------------------------


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