The £1.3bn Finsbury Growth and Income trust returned investors 2.8% during April compared to 6.4% in the FTSE All Share. The investment trust’s net asset value rose 4.3%.
Train attributed the underperformance to a big bounce in UK oil majors, with BP up 12% and Shell up 14% during the month.
Train described the businesses as formidable, but said the trust does not invest in commodity plays or capital intensive companies.
Shell shares are up less than 70% since 1998, while BP shares are up less than 20% over that period, Train noted.
He said: “In our opinion to bet on the next 20 years being a better time requires one to make macroeconomic or, even worse, geopolitical judgements that we do not feel qualified for.
“In the meantime, if oil and commodities are going to drive the UK stock market higher we must console ourselves with the thought that at least we have meaningful exposure to proxies for the UK market, notably LSE, Hargreaves and Rathbone.”
Time will tell whether the UK’s resource-rich index or the tech-dominated US indices will outperform, Train added.
In May, US president Donald Trump quit the Iran nuclear agreement meaning oil has continued to rally on geopolitical concerns in the Middle East. Investors have been split over the implications for the future direction of the oil price.
Train reiterated his commitment to low capital intensity businesses and well-known brands.
