There are four things investors need to know about Finsbury Growth & Income Trust (FGT).
1. Finsbury Growth & Income Trust has a high-conviction, very concentrated portfolio.
Finsbury Growth & Income Trust (FGT) was launched in January 1926 and is listed on the Main Market of the London Stock Exchange. Boutique investment firm Lindsell Train was appointed as the trust’s manager in December 2000 and since January 2001 the fund has been managed by one of its co-founders, Nick Train. In 2019, Madeline Wright was appointed as FGT’s deputy manager.
The managers aim to achieve capital and income growth and a total return above that of the broad UK stock market from a concentrated portfolio of mainly UK equities. Although up to 20% of the fund may be invested in overseas companies that meet the managers’ strict criteria, none are currently held. FGT has a progressive dividend policy. As well as revenue reserves, the trust has a large special distributable reserve, which can be used to return cash to shareholders via dividends and share repurchases when required.
2. The managers seek durable businesses with high returns, low capital intensity and strong cash flow.
FGT’s portfolio only has around 20 holdings, with a 15% maximum position size, meaning the trust’s performance can deviate meaningfully from that of the UK stock market. Train’s philosophy is that wealth creation requires a concentrated approach, while diversification is necessary for wealth protection. A minimal amount of gearing is employed as the managers are mindful of the inherent high risk from having a concentrated portfolio.
Train and Wright focus on growth businesses with high-quality management teams that they believe are trading at a discount to their intrinsic value and can be held for the long term, thereby reducing the drag of transaction costs. Historical portfolio turnover of c 3.0% per year implies a more than 30-year holding period. For reasons of prudence, once a position reaches 10% of the fund it is not added to and is actively reduced if it reaches 12.5%.
The managers seek companies with the following attributes: durability – businesses that can grow over the long term, regardless of the economic cycle; a high return on equity; and low capital intensity and high cash flow generation that can support sustained dividend growth.
3. FGT’s portfolio can be broken down into three broad themes.
The trust’s portfolio has exposure to just five of the 11 broad market sectors and represents three broad investment themes. Firstly, ‘digital winners’, which are data analytics and software companies making up around 60% of the fund, such as Experian, Sage Group and London Stock Exchange Group. Secondly, consumer brands representing around 30% of the portfolio, including Unilever, Diageo and Burberry. Finally, ‘other’, which make up around 10% of the portfolio and include fund management businesses Schroders and Rathbones Group. The top 10 holdings make up around 90% of the portfolio.
4. FGT has a commendable long-term performance
Although the trust’s performance has lagged the UK market in recent years as the environment of higher inflation and interest rates has been detrimental to the valuation of long-duration growth assets, FGT has an enviable long-term record. The trust’s NAV total return ranks third out of 18 funds in the AIC UK Equity Income sector over the last decade. Train has amassed around a 4% holding in FGT, which is a considerable amount of ‘skin in the game’.
Published on 31 October 2025
