Monthly Update August 04

Lindsell Train Investment Trust PLC
09 September 2004


                            The Lindsell Train Investment Trust PLC
                                     As at 31 August 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 92.50
Net Asset Value                                                       GBP 105.82
Premium (Discount)                                                       (12.6%)
Market Capitalisation                                                 GBP 18.5mn
Benchmark (21/2% Con Ann Avg Yield +5.0%)                                   +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 %                                    +13.0         +3.0        -9.6       +3.2        n/a
Share Price %                                         +9.7         -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    +4.7 
Share Price %        -2.3     +5.9     -0.6     +0.6     +2.2      +2.7     +0.5    +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                                                                  26.5
Preference Shares                                                      14.0
Equity - Media                                                          7.9
Equity - Banks & Investment Co.                                         3.6
Equity - Leisure & Ent.                                                 9.5
Equity - Food & Beverage                                               28.8
Investment Fund                                                        24.8
Cash & Equivalent                                                    (15.1)
Total                                                                 100.0
Source: Lindsell Train


Top 10 Holdings                                                    % of NAV
US Gov Treasury 6.25%                                                  11.9
Glenmorangie A&B                                                       11.2
Lindsell Train Global Media (Dist)                                     10.8
Lindsell Train Japan (Dist)                                            10.3
HBOS 9.25% Non Cum                                                      9.5
21/2% Consolidated Loan Stock                                           8.4
Barr AG                                                                 8.2
UK Treasury 2.5%                                                        6.2
Cadbury Schweppes                                                       6.2
Wolverhampton & Dudley Breweries                                        5.1
Source: Lindsell Train


Fund Exposure                     Bonds          Prefs        Equity         Funds         Cash          % of NAV
UK %                              14.6           14.0          43.5           3.7         (15.7)           60.1
USA %                             11.9             -            1.9          10.8           3.6            28.2
Europe (ex UK) %                    -              -             -             -             -              -
Japan %                             -              -            4.4          10.3          (3.0)           11.7
Total                             26.5           14.0          49.8          24.8         (15.1)          100.0
Source: Lindsell Train




Fund Manager's Comments
The Trust's NAV advanced 4.8% over the month, mostly due to the contribution
from the rising price of Glenmorangie shares. The A and B shares were up 36% and
42% respectively. The Trust's combined holding in the company amounted to 12% of
net assets at the end of August; split 8% in the A's and 4% in the B's.

The Macdonald and Muir families have owned a controlling shareholding in
Glenmorangie for 111 years, but announced an intention to sell their interests
in August, following which the shares began their sharp ascent. We have always
recognised the potential hidden value in the business but never had any
expectation that the majority ownership would change. Our initial investment was
predicated on the expectation for a steady increase in sales of the company's
single malt brands, underpinned by extensive new investment in maturing stock
and an attendant increase in marketing expenditure to raise the sales potential.
This harmed short-term profitability. Between 1998 and 2003 sales rose by one
third yet operating profits fell by 7%. Unlike other investments we own, the
average dividend yield on purchase, 2.9% for the A shares and 0.9% for the B's,
offered a lower margin of safety versus our theoretical cost of funds than we
otherwise seek. However, the management's confidence in the underlying strategy
was evident from successive dividend increases though this period of profit
decline that, at 35%, even exceeded the rise in sales. Both the 15% increase in
dividends, since we bought the shares, and the more recent signs that profits
are now improving helped underpin a satisfactory 60% rise in the shares from
purchase even prior to the recent announcement. Now that the business is for
sale there is the potential for a further premium as global spirits companies
compete, we hope, to own this fine collection of brands. In addition to judging
the extent of this premium, we need to rationalise the eventual division of
value between the A shares, with a higher current dividend yield and the B
shares that have 5 times the votes of the A's. The sale process has only just
begun and will likely last the remainder of the year. Our initial response was
to buy all the B shares we could, unfortunately only 250 so far. We await
further developments.

This news presents us with a quality problem. We stand to reap a substantial
profit for the Trust but lose one of our best investments. We have no immediate
candidates to replace it with other than adding to our existing positions on
weakness. For instance, we bought more Diageo earlier this month following a
fall of 15% from its recent high, down to a historic dividend yield of 4%.
Should we lose our shareholding in Glenmorangie, as seems likely, it is
conceivable that we would simply repay our short-term debt that has become 25%
more expensive this year following successive rises in UK short-term interest
rates.

The implications of the rise in the price of Glenmorangie stretch beyond the
direct short term rise in the net asset value of the Trust alone. The Finsbury
Growth and Income Trust, itself a 4% holding in the Trust, bought earlier this
year following a change in the investment mandate (see the March monthly
review), has a 14% holding in the A and B shares. Indeed the Lindsell Train UK
equity strategy has £15m of its £115m total assets under management invested in
Glenmorangie shares alone, adding yet another performance fillip to what was
anyway proving to be a banner year for the strategy.

Another, but lesser contributor to performance this month has been the recent
weakness in Sterling versus the US Dollar. There are many sound and well-
reasoned arguments why the US Dollar should lose its value but we think few that
stand up to scrutiny when comparing its value versus Sterling. Any traveller
will testify how equivalent goods and services cost the same whether priced in
US Dollars or Pounds, even though the Pound is valued at 1.8 times one US
Dollar. However travellers do not move exchange rates, businessman and investors
do. Lately Sterling property returns and short-term interest rates have acted to
draw investment funds into the UK. Should that allure recede either absolutely
(because property price stagnate) or relatively (because interest rates rise
faster elsewhere) Sterling could then fall to a level that more adequately
reflects its true purchasing parity. Could it be that we are near such a
juncture today?



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.
ISIN                          Bloomberg                                  Listing
GB0031977944                  LTI LN                                     London Stock Exchange

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
9 Sep 2004 LTL 000-018-8b


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

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





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