Star stock picker Nick Train apologised yesterday for the poor performance at his Finsbury fund – but said he was betting on a pick-up for the UK market.
Train expressed frustration about the ‘malaise’ gripping undervalued London-listed shares.
However, he said that over the past year the fund has been deliberately reducing the size of overseas holdings.
‘This is because the opportunity we see in the valuation of world-class, London-listed businesses is so great, after a long period of sub-market returns, that we feel we have to take advantage,’ he said.
Apology: Nick Train (pictured) expressed frustration about the ‘malaise’ gripping undervalued London-listed shares
The comments reflect a growing sense in the City that while UK stocks have been suffering a dismal past year or two, sentiment has turned – with the FTSE 100 recently advancing to record highs and a series of possible stock market floats in the pipeline.
Finsbury Growth & Income Trust returned just 2.7 per cent to shareholders for the six months to the end of March, according to results published yesterday.
That compared with a 6.9 per cent rise in the wider FTSE All-Share Index over the same period. Train admitted it was a ‘poor’ performance.
‘We really should be able to do better than this and if we can’t, then I absolutely share shareholders’ growing impatience,’ he said. ‘We do acknowledge and apologise for it.’
The fund manager’s Lindsell Train group runs a series of funds including Finsbury, which has £1.7billion in assets.
Train said he remained optimistic about the company’s investment portfolio despite ‘three years and more of underperformance’.
Finsbury’s results showed that it was boosted by the performance of holdings in publisher RELX, credit scoring firm Experian and software business Sage.
The main detractors were fashion group Burberry, drinks maker Remy Cointreau and asset manager Schroders.
Train admitted that over a longer period, Finsbury had suffered by not owning UK-listed oil and mining shares since the world economy emerged from Covid lockdowns and that it also did not have enough exposure to tech firms.
But he remained upbeat: ‘Contrary to popular perception and despite its dismal recent performance, the UK stock market is in fact home to several world-class companies.’
Train said it was the opportunity offered by UK-listed shares that had led him to reduce the size of Finsbury’s three non-UK holdings, Heineken, Mondelez and Remy Cointreau.
Shares in the fund, however, fell 0.25 per cent, or 2 per cent, to 811p.
But Train’s comments come amid growing signs that the City is starting to shake off the pessimism that has seen UK firms fall prey to a rash of foreign takeover attempts.
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