Monthly Update

Lindsell Train Investment Trust PLC
15 August 2006


                                        The Lindsell Train Investment Trust PLC
                                                   As at 31 Jul 2006
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 135.78
Share Price                                                           GBP 129.50
Premium (Discount)                                                        (4.6%)
Market Capitalisation                                                 GBP 25.9mn
Benchmark (21/2% Con Ann Avg Yield +4.3%)                                   +0.4
Source: Bloomberg; NAV-Lindsell Train. Share Price
quoted is closing mid price. See Benchmark definition.

Performance History (based in         2001     2002       2003        2004            2005              YTD 2006
GBP)
Net Asset Value TR%                   +3.2     -9.6       +3.1        +23.7           +16.5               +2.9
Share Price TR%                       +18.5    -19.8      -8.7        +20.6           +27.5               +2.4
Source: LTL and S&P Micropal. Performance years listed Jan - Dec. Launch date 22 Jan 2001. TR=Total Return (with
dividends reinvested) *Source: Lindsell Train Ltd. 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.


2005 Performance      Jan   Feb   Mar   Apr   May   Jun   Jul   Aug     Sep       Oct           Nov            Dec
Net Asset Value TR%  +1.4  +0.3  +1.7  +0.2  +3.4  +2.9  +0.0   +0.2    +1.0      -1.5         +2.3*          +2.9
Share Price TR%      +8.6  +3.5  -3.4  +1.8  +2.6  +9.3  +0.4   -2.3    +2.4      -3.9         +1.2           +4.0
Source: LTL and S&P Micropal unless otherwise indicated. Performance years listed Jan - Dec. Launch date 22 Jan 2001.
TR=Total Return (with dividends reinvested) *Source: Lindsell Train Ltd.


2006 Performance      Jan   Feb   Mar   Apr   May   Jun   Jul    Aug     Sep       Oct          Nov           Dec
Net Asset Value TR%  +0.9  +1.9  +1.2  -1.8  -2.0  +1.8   +1.7
Share Price TR%      -3.0  +7.5  +1.5  +3.4  -1.5  -2.6   +3.2
Source: LTL and S&P Micropal unless otherwise indicated. Performance years listed Jan - Dec. Launch date 22 Jan 2001.
TR=Total Return (with dividends reinvested) *Source: Lindsell Train Ltd.

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                                                            19.0
Preference Shares                                                13.6
Equity - Media                                                   12.2
Equity - Banks & Investment Co.                                  6.0
Equity - Leisure & Ent.                                          12.1
Equity - Food & Beverage                                         29.2
Equity - Consumer Goods                                          1.8
Equity - Internet                                                0.9
Investment Fund                                                  20.5
Cash & Equivalent                                               (15.3)
Total                                                           100.0
Source: Lindsell Train


Top 10 Holdings                                             % of NAV
Barr AG                                                     10.6
HBOS 9.25% Non Cum                                          10.5
Lindsell Train Global Media (Dist)                          10.05
Diageo                                                      8.1
Cadbury Schweppes                                           7.5
21/2% Consolidated Loan Stock                               7.1
US Gov Treasury 6.25%                                       6.4
Wolverhampton & Dudley Breweries                            6.1
Lindsell Train Ltd                                          6.0
Nintendo                                                    6.0
Source: Lindsell Train


Fund Exposure         Bonds      Prefs        Equity          Funds              Cash                 % of NAV
UK %                   12.5      13.6          29.3            4.4              (15.5)                  64.3
USA %                  6.5         -            2.2             -                5.3                    14.0
Europe (ex UK) %        -          -            4.7             -               (2.5)                    2.2
Japan %                 -          -            6.0            5.6              (2.6)                    9.0
Global %                -          -             -             10.5               -                     10.5
Total                  19.0      13.6          62.2            20.5             (15.3)                  100.0
Source: Lindsell
Train


Fund Manager's Comments

We bought a new stock this month, funded, as in the past, from our fixed interest holdings. The company is eBay and we
committed 0.9% of shareholder capital to it, selling a piece of our US Treasury bond, 6.25% 2030. Since we made the
trade the equity has fallen by 10.0% and the bond gained nearly 2.0%. Fortunately, we still own 7.0x as much of the
latter as the stock and intend to make further additions to eBay on weakness.

The rally in the Treasury bond is explained by a downward shift in US inflation expectations, where GDP growth is now
certainly slowing, to 2.5% in Q2, from 5.6% in the first. We still see 25 year US bond yields of over 5.0% as
attractive compared to current rates of inflation and the possibility that the slowdown develops into something
nastier. A lot of market capitalisation worldwide hangs on the resilience of the US consumer, which is being tested by
rising interest rates and energy costs. Gasoline, at $3.0 per gallon in July 2006, is 32.0% dearer than a year ago.
Perhaps it is no surprise that Ford's domestic truck sales are down 34.0% over the same period. Turning to the UK, we
note that the long gilt has also rallied, up 3.0% from April lows. Again, there is a tension in the UK economy, between
energy costs up 29.0% year-on-year and, say, the 80.0% increase in UK personal bankruptcies in Q1 2006 over last year.
There must be a possibility that the tension is resolved by consumer slowdown, which we expect to boost gilt prices.
Conventional gilts have outperformed UK equities over 5 and 10 years now, to end Q2 2006, as have index-linked gilts
and property. We expect equity outperformance to reassert itself, but worry, a bit, that so does everyone else.

eBay is a business we have admired for many years, but have not, until very recently, been able to make any sense of
the valuation. The company is forecast to earn $1.0 or more in calendar 2006, which meant the share price that got to
$58 in early 2005 was discouraging to investment, to say the least. However, since that all-time high - interestingly
eBay did not peak in 2000 - the shares have more than halved, to $23.60, as this note is written. At this level, of
course, the stock is valued on an earnings yield of over 4.0%, which we regard as a snip, if eBay can grow from here.
Currently there are doubts amongst investors about that growth rate, with a definite deceleration apparent in the US
auction business, the most mature part of the group and unquantifiable concerns that competition from Google will
undermine eBay's business model - which, after all has less than 10 years history as a quoted entity. The counter,
bullish case, can be made by a brief review of trends in eBay's most recent quarterly. Here, total revenues were still
ahead 30.0% year on year, with active users of the auctions up 20.0%. Meanwhile, the two newer sources of growth, the
Paypal online payments service and Skype, for VOIP free telephony, saw registrations up 29.0% y-o-y and 19.0% q-o-q.
Skype's user base has more than doubled to 133 million since eBay purchased it last year.

Perhaps most intriguing though, is the fact that in Q1 2006, online transactions in the US still only accounted for
2.6% of total retail sales, suggesting that there is much more to come. We think eBay will share in this growth and
prosper for as long as consumers value the accuracy of an auction process in establishing the 'correct' price for goods
and we can't think of a more purchaser-friendly means of doing so. In addition, auctions are fun - not a trivial
consideration.

eBay has $4.0 billion of net cash, built up over remarkably few years. In a decisive break from history to date, the
company announced it will use half that cash to institute a share buyback programme - for the first time. Investors
tend to take the sight of 'growth' companies retiring equity as a sell signal, because it implies that organic
investment opportunities have dwindled. Perhaps so, but, to our eyes, there is a distinct difference between eBay
buying back shares in itself at $58 and $24. At $24 the stock is cheap and the buyback likely highly accretive. This
evidence that management allocates capital rationally makes us more enthusiastic to be owners of part of this business.


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
Donald Adamson                          Performance Fee: 10% of annual increase Springfield Lodge, Colchester Road
Dominic Caldecott                       in the share price, plus dividend,      Chelmsford
                                        above the gross annual yield of the 2   ESSEX  CM2 5PW
Michael Lindsell                        1/2% Consolidated Loan Stock.
Michael Mackenzie

ISIN                                    Secretary                               Listing
GB0031977944                            Phoenix Administration Services Limited London Stock Exchange

Bloomberg
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
14 Aug 2006 LTL 000-038-6b

                                                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.





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