Nick Train ‘pleased’ with performance of Finsbury Growth and Income

Finsbury Growth & Income staged a tentative comeback in October after a gruelling year in which the investment trust has underperformed the market. 

Fund manager Nick Train said he was pleased with the performance of several of the investment trust’s holdings over October.

Finsbury’s NAV per share total return inched 0.4 per cent higher but it is down 10.7 per cent in the year-to-date.

The investment company’s share price gained 0.8 per cent across October but underperformed the FTSE 100 which gained 3.1 per cent over the month.

The investment company has struggled this year amid rising costs and the rotation from growth to value stocks. 

In May, Train apologised to investors for the disappointing performance of the trust.

However the Lindsell Train co-founder has doubled down on his investments into consumer brands which he says are ‘durable businesses’.

In the trust’s latest monthly factsheet, Train highlighted Mondelez, the American company which took over Cadbury in 2019, as an example.

The company’s earnings grew 16 per cent in the third quarter and its net revenues increased by 8.1 per cent year-on-year.

He said he imagines ‘most investors want a proportion of their portfolio invested in a business like Mondelez, which can deliver inflation protection and steady real growth through good times and bad’.

Unilever’s strong performance also went some way in vindicating Train’s strategy. The consumer giant reported its third quarter revenues had jumped 10.5 per cent year-on-year despite price increases of around 12 per cent and volume declines of 1.5 per cent, a ‘reassuringly low rate of attrition’.

Train said the company’s assertion that the ‘mega brands retain both pricing power and growth potential even in these tougher times’ was ‘credible’.

Away from consumer stocks, Train doubled down on his holding in London Stock Exchange and said he was ‘bewildered’ it was not held in more pension funds.

In its quarterly update, LSE’s underlying revenue increased by 7 per cent with recurring revenues ahead of expectations.

‘I was asked by an investment banker what we thought of these LSE results. My response was that they were encouraging and that it bewildered me that a company of this scale (£40billion) and potential was not a cornerstone holding in every UK pension fund.’

Train added LSE continues to reap the benefits of its acquisition of Refinitiv in 2021.

‘LSE’s claim that the acquisition of Refinitiv has brought a meaningful enhancement of the quality of the company and its long-term growth rate seems better founded with each passing quarterly update.’ 

Looking ahead, Train said he would continue to ensure investors’ money is put into ‘durable businesses that have the potential to protect against monetary inflation and benefit from secular growth trends too.’