Stock Focus: Finsbury Growth & Income Trust

Ruth Harris, Investment Research Analyst

Many fund managers state that they invest with a long-term perspective, looking beyond short-term volatility driven by news headlines, changing investor sentiment, and transitory trends. In practice, however, there is often exceptional pressure on managers to alter their strategy during periods of underperformance, particularly if that underperformance persists over time.
 
One manager currently facing this scrutiny is Nick Train, co-founder of Lindsell Train and fund manager of Finsbury Growth & Income Trust (FGT). In this article, we assess FGT, and whether its long-term investment philosophy is merely out of favour after a long period of success, or whether something more fundamental has changed and the approach is no longer capable of generating attractive returns.
 
Is a long-term approach effect?
Train has over 40 years of investment experience and has built a reputation for high-conviction investing with a patient, long-term approach centred around quality companies. More recently, however, a prolonged period of weak performance has brought greater scrutiny to both the trust’s positioning and the viability of its investment style in the current market.
 
Quality or quantity?
Founded in 1926, FGT recently celebrated its 100-year anniversary and offers investors access to a highly concentrated portfolio of UK companies, with just 21 holdings as of April 2026 and the top ten positions accounting for more than 85% of assets. This concentration reflects Train’s longstanding belief that superior long-term returns come from owning a relatively small number of exceptional businesses for many years. Historically, this approach delivered strong results for shareholders, particularly during the prolonged era of low interest rates which favoured quality growth companies with dependable earnings and strong cash generation.
 
A challenging investment landscape
The investment philosophy implemented by Lindsell Train focuses on identifying companies with durable competitive advantages, high returns on equity, and strong free cash flow generation. The managers favour businesses capable of compounding earnings steadily over long periods, rather than firms experiencing rapid but potentially unsustainable short-term growth. Companies requiring relatively limited capital investment to grow are also preferred, as this can support higher profitability and shareholder returns over time. Historically, this led the trust towards holding large allocations of consumer businesses, many of which benefited from stable demand, pricing power and highly recognisable brands.
 
However, the market backdrop shifted materially following the return of inflation and higher interest rates. Investors became less willing to pay premium valuations for dependable long-duration growth businesses, while more cyclical and economically sensitive areas of the market performed strongly. As a result, the trust has experienced a difficult period of relative performance. Over the last five years, the share price of the trust has fallen over 5%, significantly behind the wider peer group average positive return of over 40%. The concentrated nature of the portfolio has amplified this weakness, as poor performance from a small number of holdings can have an outsized impact on overall returns.
 
A shift in focus 
In response, the trust has gradually repositioned the portfolio while remaining broadly consistent with its quality-focused philosophy. Increasingly, the emphasis has shifted towards businesses involved in data, software and platform services. These companies provide digital infrastructure and specialised information services across industries such as banking, legal services, automotive, property, shipping, and finance. Holdings such as London Stock Exchange Group, Experian, RELX and Rightmove now form a substantial part of the portfolio. Alongside these positions, the trust retains exposure to premium consumer brands and asset management businesses, areas where Train still sees enduring competitive advantages and long-term growth potential.
 
Why data matters
This shift means the trust increasingly resembles a thematic portfolio focused on the value of proprietary data, digital infrastructure and entrenched market positions. Several software and data companies experienced sharp share price declines amid investor concerns around artificial intelligence potentially disrupting incumbent business models. However, Train has argued that companies with deep, high-quality proprietary datasets and products embedded into customers’ workflows may in fact benefit from technological change over the long term. Businesses that are deeply integrated into client operations can be difficult to displace, particularly where reliability, regulation, and trusted data are critical.
 
Criticism of leadership
Nevertheless, the repositioning has yet to deliver a sustained turnaround in performance, and investor patience appears to be wearing thin. Critics argue the trust was slow to adapt when market leadership began to change and that the manager’s reluctance to sell long-held positions may have hindered performance. The portfolio’s concentration and emphasis on ‘forever holdings’ can leave the trust exposed when particular sectors or investment styles fall out of favour. Continued weakness has also fuelled discussion around whether strategic review may be required if performance does not improve, including the potential for the board to remove Lindsell Train from management and shift the mandate to another firm.
 
In Summary…
Despite these challenges, the trust offers exposure to a distinctive, high-conviction portfolio managed with a patient mindset, something increasingly uncommon in modern markets. Whether the recent repositioning proves successful remains uncertain, but for investors frustrated by short-term market noise and seeking a differentiated approach to UK equities, Train’s long-term philosophy may still hold appeal.
 
Please note that this communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned. Investments and income arising from them can fall as well as rise in value. Past performance and forecasts are not reliable indicators of future results and performance. The information and views were correct at time of publishing but may have changed at point of reading.