Train: Why new Kindle tablet is more important than euro crisis

Nick Train, manager of the £333m Lindsell Train UK Equity fund, has said the most important development for equity markets in Q3 had nothing to do with Greece or the eurozone.

Train, whose fund is top decile in the UK All Companies sector over one, three and five years, said the productivity gains produced by technology such as Amazon's Kindle Fire could have highly significant implications for great swathes of the global quoted sector.

The launch of the Kindle Fire, Amazon's tablet version of its e-reader Kindle product, was announced on 28 September.

"We have been saying to shareholders and potential investors we think far and away the most important news development in Q3 2011 had nothing to do with Greece or the euro. From our perspective the most important development was Amazon's Kindle Fire."

Train said his theory was not so much an endorsement of Amazon itself as it was a recognition of the productivity benefits resulting from a device that has significantly cut the cost of mobile computing power and access.

"We may be wrong on this, but equity value over time is typically driven by secular real growth and productivity gains. That is much more of a technology issue than one relating to politics or currencies," he said.

"At the most generalised and abstract level of analysis, what these devices will do is lead to a prodigious saving of time. All other things being equal, that sort of gain should generate more economic growth and activity."

Train said he was playing the theme in his fund through companies such as Pearson, which accounts for 8% of the portfolio, because of both its media publishing arm and its education division.

The manager pointed to the "near certainty" that school pupils will rely on electronic devices rather than textbooks within the next decade.

Train's UK Equity fund has returned 12.7% over the year to 28 October versus an average of 1.4% for the IMA UK All Companies sector, according to Morningstar. Over three years it has returned 102.2% against a sector average of 64.2%.

Looking at equity markets as a whole, Train said recent M&A activity - such as LVMH's purchase of Bulgari and SAB Miller's acquisition of Fosters - corroborated his belief in the resilience of consumer brands.

"Consumer brands that have any sort of global resonance are much more valuable than stock market ratings suggest. The LVMH and SAB Miller acquisitions, two deals which have been struck way in excess of market prices, support this view," he said.