Finsbury Growth & Income performance 'concerning' as trust lags benchmark for third consecutive year
Train credited the underperformance to three key factors: Avoidance of commodities and banks, high conviction holdings such as Hargreaves Lansdown and London Stock Exchange Group not performing well and underestimating the significance of technology change.
In the year to 30 September, the trust's share price and NAV returned 7.5% and 7.2%, respectively, compared to a FTSE All Share index increase of 13.8% in the year.
The underperformance relative to the benchmark means the trust ranks 22nd out of 23 in the UK Equity income trust sector over the last three-year period, only up 11.8% compared to the index's 39.8%.
Over the last year, FGT ranked 14th out of 23, compared with fifth place in 2022. Additionally, the trust's share price has declined since 30 September, falling 2.4%.
Lindsell Train trust NAV dragged down by fund group holding
Chair Simon Hayes described the persistent underperformance as «disappointing», noting this marks the longest such period for the trust since Lindsell Train was appointed as portfolio manager in December 2000.
Hayes noted the recent track record was «concerning» and had been the focus of the board's attention. However, he said the board continues to support manager Nick Train's strategy, noting it has delivered «attractive returns» over the long-term.
«We firmly believe this will continue to deliver strong investment returns to shareholders in the future,» he said.
In the results, FGT largely attributed the trust's poor performance to two firms - Diageo and Remy Cointreau — which lost the trust £41.1m and £32.9m over the year, respectively.
Nick Train pledges to 'keep faith' in Lindsell Train holdings as performance lags
Train credited the underperformance to three key factors:
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