Finsbury Growth & Income Trust (FG&IT) has a concentrated portfolio of between 25 and 30 UK stocks and aims to have an above-market dividend yield. Fund manager Nick Train, of boutique fund management group Lindsell Train, has been manager of the £112m trust since 2000 and says he is aiming to follow Warren Buffett's investment philosophy with a UK remit.
Mr Train aims for a low turnover, only adding a stock to the portfolio every 18 months. Using a bottom-up stock-picking approach, he looks to invest in a universe of excellent UK-listed businesses that appear undervalued.
In an uncertain economic climate, he is keen on investing in resilient companies with pricing power. The FG&IT portfolio is full of cash-generative companies with strong market positions that have typically survived challenging economic periods in their history. Its holdings include the brewers Fuller's and Young's, as well as consumer branded goods companies Diageo, Unilever and Cadbury.
However, it also includes a material exposure to Lloyds Banking Group - both ordinary and preference shares. Mr Train says "We are mortified by the (unrealised) loss of value suffered by shareholders in these instruments. However, there are signs that the worst is past."
The top 10 holdings typically make up 60 per cent of the investment portfolio. At present over 40 per cent of the portfolio's net asset value is invested in just four branded goods companies: AG Barr, Cadbury, Diageo and Unilever. "Whatever you think about the short-term prospects for price performance from this quartet, their dividends look reassuringly secure," says Mr Train.
| FINSBURY GROWTH & INCOME (FGT) | |||
|---|---|---|---|
| PRICE | 193p | NAV | 196.29p |
| SIZE OF FUND | 112.6m | PRICE DISCOUNT TO NAV | -2.95% |
| No OF HOLDINGS | 25-30 | 1 YEAR PRICE PERFORMANCE | -14.77% |
| SET UP DATE | 1926 | 3 YEAR PRICE PERFORMANCE | -31.17% |
| MANAGER START DATE | December 2000 | 5 YEAR PRICE PERFORMANCE | 0.53% |
| TURNOVER | na | TOTAL EXPENSE RATIO* | 1.10% |
| 3-YR STANDARD DEVIATION* | 20.85% | YIELD | 4.987% |
| TRACKING ERROR | na | GEARING | 113% |
| 3-YR SHARPE RATIO* | -0.41 | MORE DETAILS | lindselltrain.com |
Source: Lindsell Train, Thomson Datastream & *Morningstar
TOP 10 HOLDINGS
| Holding | % |
|---|---|
| Diageo | 10.7 |
| Unilever | 10 |
| Barr (AG) | 9.7 |
| Cadbury | 6.9 |
| Lloyds Banking Group | 6.7 |
| Pearson | 6.6 |
| Fidessa | 6.6 |
| Marston's | 5.9 |
| Sage | 5.1 |
| Reed Elsevier | 4.8 |
SECTOR BREAKDOWN
| Sector | % |
|---|---|
| Consumer services | 28.0 |
| Consumer goods | 42.0 |
| Financials | 13.3 |
| Preference shares | 5.0 |
| Technology | 11.7 |
