Fund Profile

Finsbury Growth & Income 30 January 2024


Disclosure – Non-substantive Research

This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. With this commentary, Kepler Partners LLP does not intend to influence your investment firm's behaviour. 

FGT’s performance has been disappointing, but Nick Train is optimistic on prospects…

Finsbury Growth and Income (FGT) has been managed by Nick Train since 2000. FGT’s mandate for the portfolio is to generate capital and income growth, and total returns in excess of the FTSE All-Share Index. However, the FGT portfolio is very different to other funds and to the benchmark. As we discuss in the Performance section, this difference has shown up in the strong degree of long-term outperformance delivered by the trust. However, the core of what makes FGT different is the significant degree of concentration within the portfolio, and the very low turnover.

Companies in the 23-stock portfolio are selected for their potential to generate high and sustained future returns on capital, which will compound into the future. As we illustrate in the Portfolio section, the top ten holdings represent 85% of the total, meaning NAV returns will be influenced by company specifics. For example, despite some elements of the portfolio performing strongly during 2023, poor share price performance from large holdings Burberry and Diageo contributed to a disappointing relative NAV performance in 2023. Nick’s willingness to be patient is legendary, with any new purchase in the portfolio making headlines in the trade press.

FGT aims to grow capital and income, but given the focus on growth and the high quality of the portfolio companies, FGT only yields 2.3%. As such, as we discuss in the Dividend section, it is something of an outlier in the UK Equity Income sector in which dividend yields are more often double this.

Over the last five years, FGT’s NAV performance has been pedestrian on a relative basis. FGT has performed almost exactly in line with the benchmark and the peer group average. In particular, performance over 2021, 2022 and 2023 has been disappointing, with each year seeing underperformance relative to the benchmark.

Kepler View

Since Lindsell Train took over the management of the trust in 2001, FGT has delivered a NAV total return of 631%, which compares to the FTSE All-Share Index benchmark return over the same period of 215.5%, representing a significant outperformance. This has been achieved with only slightly higher annualised volatility than the benchmark. As well as harnessing the strong growth of his portfolio companies, and allowing compounding over the long term to work its magic, the large-cap defensive nature of many of these companies has helped give the trust defensive characteristics when markets fall.

Shorter term, the last three years have been poor. This is a disappointing result for Nick, given his strong long-term track record is built on employing the same highly differentiated approach in a consistent manner. Since 2021, and perhaps as a result of this underperformance, FGT has traded at a persistent discount to NAV. The trust has a rigorous discount control mechanism, which means that the shares should trade between a 5% discount and a modest premium of 2%. This has had the effect of minimising discount volatility – certainly relative to the average for the AIC UK Equity Income sector. Currently FGT trades on a discount of 6.6%, in at the lower bound of the board’s target range, meaning that for those attracted to the Lindsell Train UK strategy, FGT could be an interesting opportunity.


  • Unique and differentiated portfolio, backed by high conviction
  • Strong long-term performance
  • Discount to NAV at lower end of board’s target range


  • Yield is very low when compared to peers
  • Performance has been uninspiring over the last three years
  • Concentrated portfolio means shareholders are exposed to specific risks
Continue to Portfolio

Fund History

10 Jul 2024 Things can only get better
Discounts are yawning but markets are thawing and boards are on the offensive; Labour might not be the only thing making a comeback this year...
30 Jan 2024 Fund Analysis
FGT’s performance has been disappointing, but Nick Train is optimistic on prospects…
11 Oct 2023 You say potato
Despite being in the same sector, investment trusts in the UK Equity Income sector could be more lowly correlated than you might think…
11 Jan 2023 Solving the Rubik’s Cube
We reveal the winners of our investment trust ratings for 2023…
05 Jan 2022 Kepler’s top-rated trusts for 2022
We unveil the winners of our ratings for 2022 in the Growth, Income & Growth and Alternative Income categories…
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
06 Aug 2020 Recipe for disaster?
In this article, we assess whether the recent shift to concentrated portfolios has been beneficial or detrimental during corrections…
28 Aug 2019 Quality street: can the dominant style continue to outperform?
For several years, quality as an investing style has dominated, outperforming both value and growth. We examine why the case for quality remains strong and the importance of taking an active approach…
14 Aug 2019 Dangerous ground: the perils of timing the market
Our research shows that attempting to time the market is, more often than not, a mug's game...
15 Apr 2019 Fund Analysis
Fund manager Nick Train ignores the benchmark entirely - investing in companies which he believes will perform well...
27 Feb 2019 A marathon not a sprint
Our research shows that investment trusts' structural advantages give them a significant edge for investors seeking long term capital growth...
30 Jan 2019 The Growth Portfolio
Our ten investment trust picks for long-term capital growth...
24 Dec 2018 Why did the chicken cross the road?
Because he was so bored of reading newspapers devoted entirely to Brexit he was hoping he’d be hit by a truck.
07 Nov 2018 The Great British Buffett
New research claims to have identified the secret of Warren Buffett's success; we apply similar principles to find the UK's answer to The Sage of Omaha...
06 Nov 2018 Fund Analysis
A highly concentrated, high conviction and benchmark agnostic investment trust, run by Nick Train....
08 Aug 2018 Feeling giddy?
As valuations continue to soar, we consider a few equity trusts with different approaches to diversification and risk management...
09 Jul 2018 Fund Analysis
A highly idiosyncratic UK growth trust with a very concentrated portfolio and a low turnover stock picking approach...
09 Jul 2018 Go big or go home
The overwhelming evidence is that fund managers who are willing to back their convictions with punchy bets are the ones that tend to outperform by the highest margin...
20 Nov 2017 Thin ice
Our analysis shows the extent to which funds in the UK equity income sector are concentrated on just a few dividend paying stocks, revealing significant systemic risk…
20 Nov 2017 Fund Analysis
A differentiated UK income trust with a vigorous discount control mechanism that bears little resemblance to the index or its peers due the manager’s concentrated, stockpicking approach
12 Jul 2016 The investment trust advantage
The UK's leading managers tell us how they use investment trusts to maximise returns...
12 Jul 2016 Fund Analysis
12 Jul 2016 Taking the bull by the horns
We examine the boards which have done most to fight for their shareholders' interests in an unforgiving arena...
12 Jul 2016 Anarchy in the UK
We collate the reactions of the City's leading investment companies analysts in the wake of the EU referendum...
19 Apr 2016 Fund Analysis
05 Apr 2016 Fighting spirit
Why investment trusts are the ultimate recovery play...
13 Oct 2015 Masters of the universe
Five of the best stockpickers in the entire investment companies sector...
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