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Nick Train to Raise £550m For Finsbury Trust

Gold-rated Finsbury Growth & Income to issue 60 million new shares in response to "significant, ongoing demand"

James Gard 8 August, 2019 | 4:33PM

Nick Train

Finsbury Growth & Income (FGT), the Gold-rated investment trust run by star manager Nick Train, has launched a programme to place 60 million new shares over the space of the year to meet “significant, ongoing demand” from investors.

The trust, which launched in 1926, has produced annualised returns of 18% over 10 years and has the highest Morningstar rating of Gold and five stars. With such strong, sustained performance the manager has attracted a loyal army of investors. 

Rebecca O'Keeffe, head of investment at interactive investor, says the recent furore around the Woodford Equity Income fund is likely to have further increased demand for shares in the manager's various funds as he has a similar remit to Neil Woodford.

"The fallout from the Woodford Equity Income saga has seen investors move towards other star fund managers, including Nick Train and Terry Smith. For investors looking for an unconstrained, high conviction portfolio, these managers offer an attractive track record," explains O'Keeffe.

Morningstar analyst Peter Brunt adds: “Finsbury Growth and Income a standout choice for investors comfortable with a highly concentrated portfolio that can look markedly different from the FTSE All Share Index. It is run by an experienced manager who has shown a disciplined adherence to a well-structured approach since launch, thereby achieving a Morningstar Analyst Rating of Gold.”

Indeed, Finsbury Growth & Income is the eighth best performing trust so far this year, according to Morningstar Direct data, up 26% year to date. Train is known for his buy and hold approach and says he ideally wants his investments to grow 100-fold in value. The manager favours companies with strong brand loyalty, with drinks companies Diageo and Heineken among his top holdings. Finsbury Growth & Income holds 22 companies within a limited range of sectors, including consumer goods, media and asset management.

Unlike the Lindsell Train Investment Trust (LTI), which Train runs with Michael Lindsell, the Finsbury trust trades at a very modest discount to net asset value. Lindsell Train sits at a 22% premium to NAV.

O'Keeffe says the issue is being done in such a gradual way that it should not cause major disruption to existing shareholders. When a bulk of new shares are issued in a single day it can often send the share price plunging as it effectively dilutes the value of existing shares by putting more into circulation. 

Unlike many UK-listed funds, the Finsbury Trust does not use gearing to enhance returns; gearing allows fund managers to boost returns but can make losses more severe. Open-ended funds are not permitted to use the tool.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Finsbury Growth & Income Ord880.39 GBX0.27

About Author

James Gard  is content editor for Morningstar.co.uk

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