Nick Train apologises for poor investment performance

UK fund manager Nick Train has apologised for his investment performance over the past few years, blaming the lack of exposure to technology and fossil fuel stocks and pointing to the broader “malaise” of the domestic equity market.

Train, who manages the Finsbury Growth and Income trust, said as it released half-year results on Tuesday that this “was yet another six-month period” underperforming its benchmark.

“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.” Train added he was also “frustrated” by the “malaise gripping the UK equity market”.

The manager, who also runs an open-ended UK fund at Lindsell Train, the company he co-founded that has assets under management of £15.2bn, said he had found it “difficult” to be optimistic to shareholders as he had been bullish “about its prospects throughout the three years and more of underperformance”.

Shares in the Finsbury Growth and Income trust returned 2.7 per cent in the six months to the end of March, compared with the FTSE All-Share Index’s 6.9 per cent in this period.

Over the past three years, the trust’s share price has dropped 2.8 per cent, while its benchmark index has risen 23.9 per cent.

Train said that “not owning UK-listed oil and mining company shares has been a persistent drag on our performance since the world economy emerged from Covid-19 lockdowns”.

However, he said the “overarching reason” for the poor performance in this time was that the strategy did “not have enough exposure to technology or companies well-positioned to exploit technology”.

Train said that to help address this issue he had bought three new stocks since 2020, including credit score company Experian and more recently the property website Rightmove.

He added that there was also a valuation gap between that of tech-advantaged UK companies and rivals listed overseas, pointing to Rightmove’s competitor CoStar in the US.

The performance of the trust had also been dragged down by a few stocks in particular, Train said, noting asset manager Schroders, luxury goods company Burberry and spirits group Rémy Cointreau.