Nick Train laments woeful wealth management share price performance

Finsbury Growth & Income manager namechecked Hargreaves Lansdown and Schroders as main offenders


Finsbury Growth & Income Trust chair Simon Hayes labelled the company’s full year results as “disappointing” after it suffered a 5.8% decline in net asset value (NAV) total return per share, while the FTSE All-Share lost 4%.

The trust’s share price fell 8.7% across the year to £8 at the end of 30 September, while its share price total return declined 5.6%, down from a 6.3% increase in FY21. It has lost all of the gains it made since 2018.

The firm’s discount widened to 5.7% from 4.5% at the end of the previous year.

Hayes attributed the results to markets and companies being “buffeted by a relentless series of economic and geopolitical shocks, including rising interest rates and inflation, domestic political turmoil, and the many devastating effects of the war in Ukraine”.

He added: “This has led to poor absolute returns from most major asset classes, a strengthening dollar and a sell-off in more speculative equity sectors.”

Despite the results, the trust increased its interim dividend by a penny to 18.1p per share.

Portfolio manager Nick Train (pictured) highlighted an improved performance in the second half of the financial year as a source of “hope” moving beyond 2022. Net asset value total return exceeded its benchmark by 4.6% in the six months to 30 September.

He said: “While there are some stock specific factors that help explain this improvement in relative investment performance, I believe it is more helpful to analyse it as resulting from a shift in investor preference – a shift back to favouring the sort of industries and companies that have always formed the backbone of [Finsbury Growth’s] investment portfolio.”

Looking at the full year, Train singled out the performance of UK wealth management holdings as especially disappointing across the 12 months. He said: “[The year] has been particularly frustrating, given that the business performance of most of the companies in the portfolio has met or exceeded my expectations.

“Hargreaves Lansdown and Schroders have suffered a miserable year in terms of their share prices, along with others in this sector, even though their businesses have grown, as measured by increases in customer numbers or assets under management. I can only hope investor sentiment will improve towards the UK wealth management industry and, indeed, for the whole UK stock market,” he added.

See also: Nick Train flags ‘shift in investor preference’

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