Star stock picker Nick Train yesterday apologized for the poor performance of his Finsbury fund but said he was betting on a UK market recovery.
Train expressed frustration at the “malaise” affecting undervalued stocks listed in London.
However, he said that over the past year the fund has been deliberately reducing the size of offshore holdings.
“This is because the opportunity we see in the valuation of world-class London-listed companies is so large, after a long period of underperforming the market, that we feel we have to take advantage of it,” he said.
The comments reflect a growing sense in the City that, while UK shares have been suffering a downturn over the last year or two, sentiment has changed – with the FTSE 100 recently advancing to record levels and a series of possible floats in the stock market in process.
Apology: Nick Train (pictured) expressed frustration at ‘malaise’ affecting undervalued London-listed stocks
Finsbury Growth & Income Trust returned just 2.7 per cent to shareholders for the six months to the end of March, according to results published yesterday.
That compares with a 6.9 per cent rise in the broader FTSE All-Share index over the same period. Train admitted it was a “bad” performance.
“We really should be able to do better and if we can’t, I absolutely share shareholders’ growing impatience,” he said. “We acknowledge that and apologize for it.”
Fund manager Lindsell Train group manages a number of funds, including Finsbury, which has £1.7bn in assets.
Train said he remained optimistic about the company’s investment portfolio despite “three years and more of underperformance.”
Finsbury’s results showed it was boosted by the performance of stakes in publisher RELX, credit rating firm Experian and software company Sage.
The main detractors were the fashion group Burberry, the drinks manufacturer Remy Cointreau and the asset manager Schroders.
Train admitted that over a longer period, Finsbury had suffered from not owning UK-listed oil and mining stocks since the global economy emerged from Covid lockdowns and also not having enough exposure to technology companies.
But he remained optimistic: “Contrary to popular perception and despite its recent dismal performance, the UK stock market is in fact home to a number of world-class companies.”
Train said it was the opportunity offered by UK-listed shares that led him to reduce the size of Finsbury’s three non-UK holdings, Heineken, Mondelez and Remy Cointreau.
Shares in the fund, however, fell 0.25 per cent, or 2 per cent, to 811 pence.
But Train’s comments come amid growing signs that the City is beginning to shake off the pessimism that has seen UK companies fall prey to a series of foreign takeover attempts.