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incomeFund manager Nick Train ignores the benchmark entirely – investing in companies which he believes will perform well…


Finsbury Growth & Income is a highly-concentrated investment trust with a portfolio of mainly UK stocks, aiming to achieve capital and income growth in excess of that produced by the FTSE All-Share.

Fund manager Nick Train ignores the benchmark entirely – investing in companies which he believes will perform well regardless of their weighting in the index. The trust tends to invest in companies that have been resilient over various cycles and exhibit steady earnings growth over the long term.

He runs a highly-concentrated portfolio which stood at just 22 stocks when last reported in February, and Nick is renowned for his very long-term, low-turnover approach. For example, the most recent addition to the portfolio was Manchester United last summer, and he has only added one other new stock to the portfolio over the past four years. This, along with his focus on high-quality, cash-generative companies with strong franchises means his portfolio is highly differentiated to his peers in the AIC UK Equity Income sector.

Over the past five years (to the end of March) the trust has delivered an NAV return of 78.9%, beating the AIC UK Equity Income sector by 44.5%and more than doubling the returns of the FTSE All Share. The trust’s returns over the longer term have been equally as strong, with it having beaten the index in nine of the past ten calendar years.

The trust is known for trading at a slight premium to par, however, in recent times we have seen this gap narrow. At the time of writing the premium is just 0.2%, relative to the three year historical average of 0.6%.



Finsbury Growth & Income Trust has a highly-concentrated portfolio of mainly UK companies, managed with an ultra-high conviction and low turnover stock picking approach by Lindsell Train co-founder Nick Train.

The portfolio is made up of just 22 stocks, with the top 10 holdings accounting for c.80% of total NAV. This is even more concentrated than in previous years, principally due to the takeover of two former holdings – Dr. Pepper Snapple and Fidessa.

Nick has a highly selective approach to stock selection and his ‘wish list’ is made up of a small number of market-leading companies, which he will not buy unless he can do so at the right valuation.

This does not happen often, so portfolio turnover is very low. In fact, until last summer, Manchester United was the only new name that had been added to the portfolio in four years. Over 2018, no new additions were made, only further increases to existing holdings.


Source: Finsbury Growth & Income February 2019


Designed to offer capital and income growth and total returns in excess of the FTSE All Share, the portfolio is dominated by three themes.

The first theme, consumer goods and services companies, is central to the portfolio – making up a combined 67.9% of its assets (as at February 2019). Its constituents are often very well-established names with multi-decade or even centuries of success – including Burberry, RELX and Unilever.

Financials (e.g. Hargreaves Lansdown and London Stock Exchange), are the second theme. Nick believes that these companies offer higher beta exposure to the long-term tendency for stock markets to rise.

Companies which via technology are radically improving productivity and opening up entirely new products and services to their customer base are the third, including Sage Group for example.

As such, and as the chart below shows, the portfolio is made up of just four ‘traditional’ sectors.


Technology remains the smallest sector allocation. However, Nick is not disinterested in the bull market being driven by digital technology.

He believes that technology is going to cause a great deal of disruption to companies and sectors over the coming decade, as winners and losers begin to emerge.

This is Nick’s greatest worry as a manager, and he hopes to stay on the right side of it in in two ways. First, he has increased his allocation to companies where the internet is going to help and reduced positions in those that may be killed.

For example, he has been adding to the trust’s holdings in Burberry, Hargreaves Lansdown and RELX – which are all companies that have effectively utilised technology to enhance their customer reach.

Secondly, he has continued to focus on the distinctive tastes of certain beverage and food brands, which he believes will remain both beloved and hard for new technology to substitute.

Nick uses Mondelez, one of the largest positions in the portfolio, as an example. Oreo and Cadbury, both owned by Mondelez, are the most popular biscuit and chocolate brands in the US and UK respectively.

Both are the leading bricks and mortar brands too. He believes that this illustrates that the brands that continue to command emotional loyalty will continue to perform well.

In some confirmation of this continuing resonance of beloved brands, we note that during 2018 there have been new all-time share price highs recorded for FGT portfolio holdings such as AG Barr, Diageo, Heineken, Remy Cointreau and Youngs.

Nick has a clear focus on the long term, and thinks the fundamental strength of a business should be all that drives an investment decision.

Macro factors are impossible to predict, and their outcomes even more so, he says, and cannot be used to drive a meaningful investment process. As such, he pays very little attention to the macro environment. Whilst the portfolio is predominantly invested in UK equities, the manager has latitude to invest up to 20% of the trust on a global basis.


growthThis trust is rated by Kepler Trust Intelligence as an outstanding option for investors seeking capital growth…Find out more 


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