Nick Train has stated he hopes better markets and new business will support Schroders as he names holdings from the Finsbury Growth & Income investment trust that have disappointed over earnings season.
In the portfolio’s July factsheet, Train noted Schroders interim dividend had only increased 3% this year compared to 17% last year, which he attributed to flat markets and flat asset gathering in the first six months of the financial year.
“We hope for better markets and new business for Schroders as 2018 progresses,” Train said.
Three-quarters of the investment trust holdings reported results over the last two months with several drinks businesses joining Schroders in disappointing dividend announcements.
Both Greene King and Remy left their dividends unchanged.
Train said: “Poor old Greene King is reduced to holding its dividend, after its glorious 30 year run of 8% pa compound dividend growth – one of the better records we know in the London market.”
Meanwhile, French brand Remy argued it could have increased its dividend by as much as 14% but had chosen to keep cash reserves for possible acquisitions of premium brands. “And we don’t demur,” Train said.
Nonetheless, the star fund manager said lots of cash was still flowing to the investment trust’s shareholders. “It would be churlish to complain,” he said.
The London Stock Exchange delivered the strongest increase at 19%, followed by Mondelez (18%, plus a share buyback) and Hargreaves Lansdown (17%).
Finsbury Growth & Income rose 1.4% over July compared to 1.3% in the index. Its net asset value was up 1.6%.
