Speaking in a webcast on the Trust’s website, Train said although he tends to avoid macro noise, the fall in oil is an unexpected dividend to both companies and consumers –and especially consumer discretionary firms.
“We can’t think of a single industry that is more benefited by the fall in the oil price than the consumer branded goods companies that form the back bone of the Finsbury portfolio,” he said.
The reason for this, Train said, is the powerful combination of falling input costs and increased consumer spending that result from lower energy costs.
The other effect of the falling oil price is that inflation has fallen in most parts of the world.
“What that means is that, probably, interest rates will stay lower for longer than many market participants expect. And, if interest rates stay lower for longer, that is great news for the valuations of the blue chip, high-quality shares that we like to have in Finsbury’s portfolio,” he added.
