Train defends concentration despite persistent Finsbury Growth & Income underperformance
Nick Train (pictured) said the portfolio has been constructed around companies in the UK stock market that are poised to benefit from AI, software and luxury consumption trends.
While according to the latest factsheet the trust's net asset value and share price total return in December rose 3.8% and 5%, respectively, with the FTSE All-Share index gaining 4.5% over the month, the fund has now underperformed its index for three consecutive years.
Train said the main contributors to underperformance over the last three years have sprung from not owning the oil and mining sector, and also due to the trust's exposure to companies where his confidence in their earnings power and undervaluation has been «misplaced».
Nick Train pledges to 'keep faith' in Lindsell Train holdings as performance lags
The manager pointed to Hargreaves Lansdown as a big detractor from returns, as well as Burberry, a top ten holding of the trust. Diageo, which represents 9.5% of the portfolio, particularly hurt performance in 2023, after its share price fell 20%.
«But I cannot spend too much time regretting or analysing past underperformance. What now matters most to shareholders and to me are future returns and that is what I am focused on,» he said.
«Is our investment approach still capable of delivering attractive absolute and relative returns and is the portfolio structured in such a way as to offer the possibility of such returns in 2024 and beyond?»
Train said the trust's approach remains unchanged, noting the structure of the portfolio makes it «very likely» to continue to perform «very differently» from the benchmark due to its high concentration.
«Of course, we hope for the better. This is for two reasons. First, the portfolio remains
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