Finsbury Growth & Income (FGT)

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.