Keith Ashworth-Lord Interview - How to invest in the best

Monday, Aug 01 2016 by
Keith AshworthLord Interview  How to invest in the best

The great US investor Warren Buffett once remarked: “The highest rates of return I've ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It's a huge structural advantage not to have a lot of money.”

What he was saying is that the more money you have to invest (in his case tens of billions of dollars), the harder it is to make outsized returns. So what would happen if you took the essence of Buffett’s strategy and used it on a smaller scale in the UK? Fund manager Keith Ashworth-Lord is finding out.

Five years ago Keith set up the Sanford DeLand UK Buffettology Fund. It’s a concentrated fund with a strict methodology that’s just passed £50 million under management and growing fast. In 2015, it made an impressive 27% return in a falling market, propelling it to the top of the IA All Companies sector.

As the fund name suggests, Keith has adopted some of Buffett’s best known investing traits. He takes a Quality + Value approach, looking for ‘moat-like’ characteristics right across the market-cap range. When he likes what he sees - and he can buy it cheap - he takes high conviction positions and holds them long-term.  

Keith runs the fund from his home turf in Manchester, where he’s been a fixture in the city’s investment community for 35 years. But he’s just as well known among US ‘Buffettologists’, and close friends with the likes of David Clark and Mary Buffett (from whom the eye-catching ‘Buffettology’ branding is licensed).

He’s also just written his own book - Invest in the Best - where he explores what he calls Business Perspective Investing and the financial clues to finding great quality companies on attractive valuations.

We agreed to meet for steak and chips at Malmaison, a stone’s throw from his office. It’s a lunch menu that Buffett would definitely approve of...

Early on in Invest in the Best, you mention that you wrote much of the book on the lanai of your Florida home. That’s a pretty big hint that you’ve found an investing methodology that works very well for you!

Ha! Well I wasn’t saying it to show off. The point I was making is that had I not been successful with my investments I’d never…

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As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested. ?>

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29 Comments on this Article show/hide all

JohnEustace 17th Aug '18 10 of 29

In reply to post #391569

It's not exchange traded so you need to go direct, or more commonly via a funds platform. I hold it via Hargreaves Lansdown.
If you look at the end of the latest factsheet there is a list of the platforms that you can invest through.

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pka 17th Aug '18 11 of 29

Thanks for this interesting article.

I was curious on how Stockopedia's ranking algorithms assess the top 10 holdings in this fund, as listed on its latest factsheet:

I've put some links to Stockopedia's pages on those stocks here:

Interestingly, at the time of writing, all these 10 holdings have above average values (i.e. over 50) of Stockopedia's Quality and Momentum Ranks, but they all have below average Value Ranks. In terms of Stockopedia's QVM StockRank, 8 have well above average values, one (AB Dynamics) has a value of 50, and one (RWS Holdings) has a value of 43.

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iwright7 18th Aug '18 12 of 29

The Buffetology fund results are super-impressive, but this has not been achieved using cheap stocks and the majority of the selected companies are a 5 year plus hold. Whilst their selection follows Buffet's principles, Keith has particular nuances that he adopts.  If ever there was a case for developing a successful share picking process and sticking to it, this is it. 

I have read every Keith interview/book/podcast I can and it has improved my investing outcome tremendously. For others with less time/interest I suggest you buy onto his fund.

As an introduction it's well worth listening to this podcast


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pka 18th Aug '18 13 of 29

As the Buffettology fund tends to hold its stocks for many years, I wonder whether one could get much of its excellent performance by buying its top 10 holdings oneself as directly held stocks. If one doesn't consider 10 stocks to be enough for a well-diversified portfolio, one could complement them by buying those stocks in the top 10 of Nick Train's and Terry Smith's funds that aren't in the Buffettology fund, because they both have similar Buffett-inspired investment philosophies to Keith Ashworth-Lord and they also tend to hold stocks in their portfolios for many years. One could check the funds' holdings once a month and mimic any changes in the top 10 holdings in one's own portfolios. This is freeloading, I know, but the savings in not paying the funds' annual ongoing charges could be very significant over the long term. For example, the annual 1.28% ongoing charge of the Buffettogy Fund means that when they're compounded over 10 years they reduce the total return of the fund by 12% from what they would have been without those charges.

Information about the top ten holdings of Keith Ashworth-Lord's, Nick Train's and Terry Smith's funds can be found on the Hargreaves Lansdowne website:,-prices--and--factsheets/search-results/c/cfp-sdl-uk-buffettology-income-inclusive/fund-analysis,-prices--and--factsheets/search-results/l/lf-lindsell-train-uk-equity-class-d-accumulation/fund-analysis,-prices--and--factsheets/search-results/l/lindsell-train-global-equity-class-a-income-inclusive/fund-analysis,-prices--and--factsheets/search-results/f/fundsmith-equity-class-i-accumulation/fund-analysis

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iwright7 18th Aug '18 14 of 29


If you look at the graph the Buffettology fund has grown 214% since April 2011, so the 1.2%/annum management fee is small beer in the scheme of things. Keith holds about 30 companies, most of which you can determine if you read his book and search the web. In addition the fund buys more if Keith thinks they are underpriced - It is the evaluation process and his judgement you are paying his management fees for.

Nevertheless all the funds you mention have a Buffet type approach so you could do a lot worse than pick the Top 10 holdings from all 3 and hold them unless something goes seriously amiss. Understanding why these type of companies have been picked and whether to back them or not, would be my personal preference, because then you have your own Buffet approach. Ian

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pka 18th Aug '18 15 of 29


Thanks for your latest post. I agree with what you wrote, except that I think you underestimate the cumulative compounding effect of management fees. 1.28% per annum doesn't sound much, but over the 7 years since April 2011, it compounds to an 8.6% reduction in the assets under management that are owned by the fund's investors.

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iwright7 18th Aug '18 16 of 29


Yes, but my point is that +214% (vs. +83% for all companies) is fantastic and if the total fund drops by -8.6% over that period it's still a fantastic result, because the %gain is so high. High fees take a real toll when fund managers match the market average or worse, but not in this particular case, which has beaten the market by 2.5x.

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pka 18th Aug '18 17 of 29


I agree that +214% over 7 years compared with +83% for all companies is fantastic. However, if there had been no ongoing chages of 1.28% per annum and everything else had remained unchanged, then the fund would have grown by +239% rather than by +214%, which represents an increase in the amount grown of 11% and would have been even more fantastic. So high fees take their toll even when fund managers do much better than the market average.

To understand this result, which may seem surprising, the calculation is as follows:

Each £100 invested in the fund just over 7 years ago has grown to £314, based on the growth of +214%. If we assume the fund has been in existence for exactly 7 years, that represents a compound annual growth rate of 17.76% (because 1.1776**7 = 3.14). That would have been 19.04% in the absence of the 1.28% ongoing annual charge. £100 invested at 19.04% for 7 years would have grown to £339 (because 1.1904**7 = 3.39).

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iwright7 18th Aug '18 18 of 29

In reply to post #391784


I admire your tenacity, but you are assuming that you can match the Buffetology fund performance by buying and holding its notifiable Top 10 holdings and thereby save the management fees. Whilst I think the Top 10 will do well, there are approx another 20 companies making up more than 60% of the rest of the funds portfolio. Nevertheless your idea has merit for the time poor. Ian

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pka 18th Aug '18 19 of 29


I don't think one could necessarily match the Buffetology fund performance by buying and holding its notifiable Top 10 holdings. But I agree with you when you wrote previously that:

"Nevertheless all the funds you mention have a Buffet type approach so you could do a lot worse than pick the Top 10 holdings from all 3 and hold them unless something goes seriously amiss. Understanding why these type of companies have been picked and whether to back them or not, would be my personal preference, because then you have your own Buffet approach."

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JohnEustace 18th Aug '18 20 of 29

In reply to post #391794

At a quick look at Buffetology, Finsbury Growth and Income, and Fundsmith I don't see any common holdings in their top tens.

So in the cost comparison you would have to allow for dealing costs to buy 30 shares to start and periodic rebalancing costs thereafter.

But isn't the bigger risk if much of the growth comes from the smaller holdings that do well, and by the time they hit the top ten their growth spurt may be running out of steam?

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iwright7 19th Aug '18 21 of 29


Yes I agree about the contribution of the smaller Buffetology holdings, although the Top 10 are largely Quality companies with appreciating share prices. 

I have modeled Keith's portfolio using web data starting in October last year using equal weighted holdings, to analyse the reasons for its success. The strongest clue comes from a Stocko Quality Rank vs. Momentum Rank comparison which produces a High QM type grouping. 


Keith says that he uses his own proprietary selection criteria and I am sure he does, but the above graphic gives a good indication of his profitability criteria and the resultant outcome.  

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sharw 12th Sep '18 22 of 29

If you think of buying the 10 largest holdings you do not know at what stage they are - whether still with potential or bought some time ago and now fully priced. Keith Ashworth-Lord makes an interesting point in his latest letter about his '3 baskets'. See:

It is worth looking out for this sheet each month - in this one he gives reasons for completely selling out of Domino's Pizza (LON:DOM)

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donald pond 2nd Oct '18 23 of 29

I started subscribing to Stocko about a year ago and my bias has always been to QM investing, so I am interested that Keith’s shares fall into this category (should also add that I hold his fund). One of the first things I did on Stocko was set up two dummy PFs based on the top ranking QM shares. I can’t remember the precise rules, but I am guessing that I was looking for Q and M both above 80. Then I set up two PFs, the first of the top 10 Momentum scores from that subset and the second of the top 10 Quality scores. Over 12 months, the momentum PF is down 3% and the Quality one up 9.5%. Too small a sample to prove anything, but interesting nonetheless.

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iwright7 2nd Oct '18 24 of 29

In reply to post #403549

Donald - Interesting that High Q is beating High M. My portfolio are mainly High Q/QM shares and I calculate its 12 month MAT at the end of each month. At the end of September my Q/QM style portfolio was up +14.5%/annum which I was a bit disappointed with, but given the uncertainty in the market is maybe not too shabby.

Keith is definitely Quality orientated and doesn't seem to give a fig about current Momentum. But one factor does tend to follow the other. I recall Keith once saying: "I do believe that long-term, there is a 100% correlation between the operating performance of a company and its share price movement".  I am convinced that he is right  and his Buffettology fund results bear this out.   Ian

 P.S.  I see that one company I hold Ferguson (LON:FERG) with a current 90Q/94QM and 80M has reported YE results this morning with its EPS up over 20% - Maybe a case in point?  

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Umar Khan 2nd Aug 25 of 29

In reply to post #391754

I had a similar thought to this...but when I looked at some of the top 10 companies, they had grown a lot.  So I concluded that these might have had great metrics previously (when he bought them) but may not have at the moment.  As that's how they made it into the top 10.  So I decided not to follow this approach.

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iwright7 3rd Aug 26 of 29


Its 2 years since Ben wrote this article and the Buffettology fund has grown from <£100M to a whopping >£1100M . The fund's cumulative return (since 2011) is some 230%; no mean achievement.  

Looking at the Buffettology current Top 10 holdings the QM scoring pattern is similar to a year ago with 9 out of the Top 10 holdings having a QM score of 80+, (see Top 10 Quality vs. Momentum graphic above).  

The Top 10 don't score so well for StockRank (table on right side) , because they tend to be the more expensive Quality stocks with a low Value score.  Increases my resolve to avoid "Cigar Butts".  As ever please DYOR. 

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pka 3rd Aug 27 of 29

As people are discussing the top ten holdings, I would like to mention that I had set up a fantasy fund called BT10 on Stockopedia on 20/8/2018, in which I invested a notional £100,000 in each of the top ten holdings of the Buffettology fund, making a total notional investment of £1,000,000. The purpose was to see how buying the Buffettology fund's top ten holdings directly would perform relative to the fund's income units, which had a value of 307p on 20/8/18. Every few months, I sold any of the stocks in my fantasy fund that had fallen out of the Buffettology fund's top ten holdings and reinvested the proceeds in the stocks that had replaced them in the top ten. I haven't rebalanced my fantasy fund since I set it up, so the largest holding is now worth about £220k and the smallest is now worth about £62k.

My fantasy fund is today (3/8/2019) worth £1,161,073, so it has increased in value by 16% (ignoring dividends and the costs of buying and selling). The Buffettology fund's income units are today at 321.81p, so they have increased in value by 5%, while the FT All Share Index has today lost 3% of its value since 20/8/18, again both ignoring dividends.

I'm not sure what to make of my fantasy fund's outperformance of the Buffettology fund's income units by about 10% over the past 9 and a half months. It's possible that it's due to the harvesting of momentum by my buying and selling rules, but my guess is it's just due to undeserved good luck.

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iwright7 4th Aug 28 of 29


In Keith's latest video interview (part 2) he estimates his success to be 5% "luck" and 95% hard work, although he also admits to getting some selections seriously wrong. 

What part does luck play in investing? – 22:20 mins in ...

The Buffettology fund holds about 30 companies and your BT Fantasy fund concentrated on its 10 largest holdings, so you could argue that because these are his biggest holdings, that they are also his best investing ideas and momentum gain outcomes. Your top cut  selection/replacement methodology may be a way to outperform Buffettology, although the timescale is too short to draw a firm conclusion. Interesting result though that merits backtesting?  

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pka 4th Aug 29 of 29

Hi iwright,

Obviously a portfolio containing 10 stocks over a period as short as 9 months is far too small a sample from which to draw any statistically valid conclusions, as luck plays a big part in its performance, and a portfolio with just 10 stocks is quite risky. I set up my fantasy fund for a bit of fun, but the results so far are encouraging.

I still think my idea of setting up a portfolio with 20 to 30 stocks, made up from the top 10 stocks of funds that are run with a Buffett-type approach and whose managers one respects, such as the funds of Keith Ashworth-Lord, Nick Train and Terry Smith, would probably work well over the long term, if one wants to avoid paying the management fees of those funds. Of course, simply buying and holding those funds is much less work, but I guess most people who subscribe to Stockopedia would prefer to buy individual stocks rather than funds.

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About Ben Hobson

Ben Hobson

Stockopedia writer, editor, researcher and interviewer!


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