Nick Train hails 7bps of outperformance as a success

Scottish fizzy drink Irn-Bru aids Finsbury Growth & Income trust’s performance

Nick Train (pictured) has hailed 7 basis points of outperformance over the FTSE All-Share benchmark in the year to date as a success in the current political and economic climate.

Finsbury Growth & Income shares are up 10.86% since January “despite Brexit, despite worries about interest rates or global slowdowns”, Train said in a video posted on the investment trust’s website this week.

The FTSE All-Share index returned 10.79% over the period, according to FE.

Over a longer time frame, the £1.6bn trust generated double the returns of the index over five years.

Finsbury Growth & Income performance

Finsbury Growth & Income10.863.6213.8247.1578.10
FTSE All-Share10.790.027.8933.8435.10
IT UK Equity Income7.65-1.994.0326.8327.32
Source: FE Analytics; total returns in pound sterling

‘Sparkling sophistication and proven medical benefits of Irn-Bru’

In the video update, Train singled out Scottish soft drink manufacturer AG Barr as an “absolutely archetypal” Finsbury Growth & Income investment that has delivered steady returns over nearly two decades. It is not the first time he has defended his hefty exposure to consumer brands following investor concerns these businesses could be vulnerable to digital disruption.

The global equities manager first purchased the maker of Irn-Bru in 2001 for around 77p per share, when Lindsell Train was handed the Finsbury Growth & Income mandate. Since then, shares in the Scottish soft drink maker have increased tenfold and are currently trading at £8.22 per share.

The FTSE All-Share hasn’t even doubled over that same period, he noted.

“The marvellous thing about AG Barr is there is absolutely no reason why the company shouldn’t continue to deliver wonderful returns for patient shareholders for the next 18 years. All that will take is for more and more people to come to appreciate the sparkling sophistication and proven medical benefits of Irn-Bru,” he joked.

AG Barr sales across the whole business were up 6% in its 2018 results, ahead of market growth. The company is also net cash, has a debt-free balance sheet and grew its dividend by 7%, he said.

Hargreaves stake

But it is his position in Hargreaves Lansdown that Train has been topping up more recently.

The Lindsell Train co-founder became the largest institutional shareholder in the D2C group on 25 March when he took his stake from 10.3% to 11%, an RNS statement last Friday revealed.

He now owns some 52 million shares in Hargreaves, meaning he has slightly over £1bn tied up with the company.

Train championed the “explosive” potential of Hargreaves in his January portfolio update, despite the fact it revealed assets under administration had fallen 6% to £85.9bn last year.

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