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Investment trust research

Finsbury Growth & Income Trust: January 2024 trust update

In this investment trust update, Investment Analyst Danielle Farley shares our analysis on the manager, process, culture, ESG integration, cost and performance of the Finsbury Growth & Income Trust.

Important information - This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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  • Manager Nick Train has over four decades of investment experience and is well known for his buy and hold investment approach

  • Train runs a highly concentrated portfolio of high-quality UK businesses with a long-term focus

  • The trust has delivered impressive returns over the long term but has underperformed the UK stock market over the past three years

How it fits in a portfolio

Finsbury Growth & Income Trust aims to grow both capital and income over the longer term by investing in a small number of high-quality UK companies. Most of the trust is made up of large well-established companies that have strong brands or powerful market franchises.

It could help diversify the UK portion of a portfolio focused on smaller companies or add exposure to UK companies to a portfolio investing overseas. When investing in closed-ended funds you should be aware the trust can trade at a discount or premium to net asset value (NAV). The income goal of this trust isn’t to provide a high yield, but rather to grow dividends steadily over time.


The trust is managed by Nick Train, who co-founded Lindsell Train Limited in 2000. He has over 40 years’ experience in investment management and during that time has established a unique investment approach. Before founding Lindsell Train, he was Head of Global Equities at M&G Investment Management, where he joined as a director in 1998. Prior to that, Train spent 17 years at GT Management, managing their income fund for 13 years and his final role was as Chief Investment Officer for Pan-Europe.

In addition to managing this trust, Train manages the Lindsell Train UK Equity fund with the support of deputy fund manager Madeline Wright as well as the Lindsell Train Investment Trust. He also co-manages the Lindsell Train Global Equity fund with Michael Lindsell and James Bullock. Given the significant degree of overlap across these portfolios’ holdings and the fact that they all use a similar investment process, we believe that Train can dedicate enough time to each.


Train seeks out a small number of high-quality UK companies that he believes can deliver good long-term total returns – growth in both capital and income. He defines a quality company as being durable, with the ability to grow earnings and generate a high level of cash in different economic environments to deliver attractive returns to investors. The trust’s objective is to deliver a growing income over time as Train believes the consistency of long-term dividend growth is more important than a high but potentially unreliable yield. He’s therefore willing to accept lower yields if he believes dividends can carry on growing over the long run, though of course this isn’t guaranteed.

Train invests in companies for the long term and once invested, lets the power of compound growth get to work. Investing in a relatively small number of companies means each holding can have a meaningful impact on overall returns, but it’s also higher risk. Train also invests part of the trust outside of the UK, with companies listed in the United States, representing the largest overseas exposure.

The trust was invested in 23 holdings at the end of its financial year in September 2023 with the top 10 holdings making up 85% of the portfolio. The top three holdings, RELX, London Stock Exchange and Diageo, were all sizeable individual positions at 12.4%, 11.6% and 9.9% respectively.

The trust’s portfolio focuses on four key areas with data, analytics and software companies accounting for the largest portion of its assets at 44%. This is followed by luxury and premium consumer brands at 31%, mass market consumer brands at 18% and UK fund management companies making up 7% of the trust at the end of September 2023.

Changes aren’t made often, but over the last financial year there was one new addition to the trust. This was Rightmove, offering an online real estate portal that fits into the data, analytics, and software category of companies. Train believes the company has the potential to create more value for its customers by leveraging the data it holds. The investment started as a small position in the trust but one that they expect to grow. Holdings are usually only sold when they no longer fit the quality characteristics Train looks for, or when their rise in value causes their position to become too large in the trust.

The trust uses gearing (borrowing to invest), which can improve gains but also magnify losses in a falling market and therefore increases risk. At the end of the trust's last financial year in September 2023, gearing stood at 0.8%, however their limit is 25%. They also have the flexibility to use derivatives, which if used, adds risk.

Please note the trust currently holds shares in Hargreaves Lansdown PLC.


Nick Train is a founder and one of the major owners of the Lindsell Train business. We view this positively as ownership of the business aligns his long-term incentives with the interests of investors. The distinct investment philosophy that he and Michael Lindsell have created runs strongly through all their funds and trusts, and the entire business is geared towards running the portfolios the ‘Lindsell Train way’.

The duo and their team spend a lot of their time reading, learning and compiling information on companies they own shares in and those on their watchlist. They have tended not to recruit experienced people, preferring to train and develop graduates who can be moulded into the Lindsell Train way of thinking.

In May, we issued an update to investors in Lindsell Train funds detailing our concerns around the capabilities and resource that the Lindsell Train business has in place to provide effective challenge to investment teams. Since then, Lindsell Train has appointed a third-party independent investment risk consultant. We welcome the progress made and will meet again with the firm in the first quarter of 2024 to assess new processes. We hope to be able to close our concerns and update investors following this meeting.

ESG Integration

All Lindsell Train funds seek to invest in exceptional companies for the long term. These companies tend to be well-managed with responsible business practices. Lindsell Train fund managers avoid capital intensive industries (such as energy, commodities and mining companies) and those judged to be sufficiently detrimental to society that they might be vulnerable to burdensome regulation or litigation (such as tobacco, gambling and arms manufacturers).

Fund managers are responsible for voting and engagement. Their long-term approach means they are generally supportive of company management teams. If the fund managers disagree with the management team’s approach, they will try to influence the company to adopt a different course of action if it’s in clients’ interests. Voting and engagement case studies are available in the firm’s annual Stewardship Report and their ESG & Engagement Report.


The trust’s annual ongoing charge to the end of September 2023 was 0.61%. Investors should refer to the latest annual reports and accounts and Key Information Document for details of the risks and charging structure.

If held in a SIPP or ISA, the HL platform fee of 0.45% (capped at £200 for a SIPP and £45 for an ISA) per annum also applies. Our platform fee doesn’t apply if held in a Fund and Share Account or Junior ISA. As investment trusts trade like shares, both a buy and sell instruction will be subject to the HL share dealing charges.

Part of the trust’s annual charge is taken from capital, which can increase the yield but reduces the potential for capital growth.


Since Train took over the trust in December 2000, he’s delivered strong long-term returns. Over this period, the trust has generated returns of 673% versus 209%* for the FTSE All-Share index. Remember past performance is not a guide to future returns. Investments fall as well as rise in value, so you could get back less than you invest.

Despite this excellent performance over the longer term, the trust has underperformed compared to its benchmark for the last three consecutive financial years. This is the longest period of underperformance since Train took over the trust. Not investing in large energy companies and banks that were major drivers of the benchmark’s performance over this three-year period has negatively impacted the relative performance of the trust.

Over the trust’s last financial year to the end of September 2023, its share price rose by 7.5% with the NAV rising by 7.2%. This lagged both the FTSE All- Share index which gained 13.8% over the same period and the AIC UK Equity Income sector average gain of 12.9%. Among the main detractors over the year were alcoholic beverage companies Diageo and Remy Cointreau. p>

Some companies in the trust have performed well over the year though. One of the best performers was RELX, a global provider of information-based analytics and decision tools, and the trust’s largest holding at the end of the financial year. Another positive contributor was software company SAGE.

In the trust’s financial year to the end of September 2023, total dividends paid to shareholders amounted to 19p per share. This is a 5% increase on the previous year.

The trust currently trades at a discount of 5.97% and has a dividend yield of 2.28%, although yields are not guaranteed and therefore are not a reliable indicator of future income.

Annual percentage growth

Dec 18 – Dec 19

Dec 19 – Dec 20

Dec 20 – Dec 21

Dec 21 – Dec 22

Dec 22 – Dec 23

Finsbury Growth & Income Trust






FTSE All Share






Past performance isn't a guide to future returns.
Source: *Lipper IM to 31/12/2023.
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Written by
Danielle Farley
Danielle Farley
Passive Investment Analyst

Danielle is a member of our Fund Research team and is responsible for analysing passive funds and ETFs across all sectors. She has worked at HL since 2018 and draws experience from different areas of the business.

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Article history
Published: 16th January 2024