Finsbury Growth and Income

[Dod101]

....how can you compare a worldwide tracker's outcome with an IT which is basically a UK oriented fund?....

Dod

Quite simply! Two different places to put my money - which will give me the better return?

I am not a particular fan of VWRL, but over the past 5 years it has clearly outperformed FGT. The yield on FGT is nothing to write home about either.

Rightly or wrongly, I have avoided general UK oriented ITs - sticking to a couple of smaller company trusts (HSL & THRG). Both have done much better than FGT - and HSL even has the same yield. As far as exposure to larger UK companies is concerned, I have a number of individual equities.

Every dog has its day in the sun, and FGT may come good - but I am not tempted.

I agree with what you say but FGT has never attempted to compare itself with a Worldwide tracker. Anyone who buys FGT surely knows what they are buying, that is a collection of the better brand names in the UK market. If you do not want that go elsewhere. I think as it happens you are right to avoid UK oriented ITs, FGT is I think the only one I still hold, because I like the portfolio, although I hold some of the constituents as individual shares as well. It is like someone buying HFEL and then commenting that say Scottish Mortgage has done much better.

I am certainly not a paid up member of the FGT fan club.

Dod

[Spet0789]

I like Nick Train's style, but I suspect that over the long term he will perform less well. His lack of exposure to technology is the biggest problem for me. If he had decent chunks of ADBE or FB, or similar growth companies, I think his fund would perform much better.

I would prefer less emphasis on the UK too, like Terry Smith has always done.

I've no doubt that he will still continue to outperform the FTSE 100 though, because looking at the quality of companies outside the UK, you would struggle not to conclude that it is stuffed with poor enterprises.

I think the likes of Smithson, BlueWhale, Fundsmith, Polen Capital and Dorsey Asset Management offer similar highly focussed, long term investment in sustainably advantaged companies, but with a better eye on the future.

Pat Dorsey, knows as much about moats as anyone, and examining his analyses may help some people here.

FGT is a U.K. equity investment trust (though with a 20% overseas bucket.) Lindsell Train also run their Global Equity Fund and the Lindsell Train Investment Trust, both of which have global mandates.

[richfool]

I like Nick Train's style, but I suspect that over the long term he will perform less well. His lack of exposure to technology is the biggest problem for me. If he had decent chunks of ADBE or FB, or similar growth companies, I think his fund would perform much better.

I would prefer less emphasis on the UK too, like Terry Smith has always done.

I've no doubt that he will still continue to outperform the FTSE 100 though, because looking at the quality of companies outside the UK, you would struggle not to conclude that it is stuffed with poor enterprises.

I think the likes of Smithson, BlueWhale, Fundsmith, Polen Capital and Dorsey Asset Management offer similar highly focussed, long term investment in sustainably advantaged companies, but with a better eye on the future.

Pat Dorsey, knows as much about moats as anyone, and examining his analyses may help some people here.

FGT is a U.K. equity investment trust (though with a 20% overseas bucket.) Lindsell Train also run their Global Equity Fund and the Lindsell Train Investment Trust, both of which have global mandates.

Absolutely, and it should also be borne in mind that VWRL (which was mentioned earlier on the thread) is a global/all world tracker, not a UK tracker.

[Aminatidi]

I like Nick Train's style, but I suspect that over the long term he will perform less well. His lack of exposure to technology is the biggest problem for me. If he had decent chunks of ADBE or FB, or similar growth companies, I think his fund would perform much better.

I would prefer less emphasis on the UK too, like Terry Smith has always done.

Presume that's where Lindsell Train Global Equity comes into it though?

I hold that and Fundsmith and tend to assume they won't shoot the lights out but won't make me poor.

[SalvorHardin]

I've been investing for long enough to remember that in the late 1990s we were being told that the sort of "old economy" companies that Finsbury Growth and Income holds were past it and that the future belonged to "tech".

Funnily enough in the 2000s these old economy companies did pretty well. "Tech", less so.

Granted, many internet-focused technology companies have been turbocharged by the coronavirus induced lockdown, but these companies can't rely upon further state intervention to entrench their position.

They're also being targeted by regulators and the tax authorities on both sides of the Atlantic, which could get messy.

As Nick Train has said on many occasions, all companies in the future will become internet companies because their use of the internet will be at the core of their operations. Most of Finsbury's portfolio already make extensive use of the internet in their everyday operations.

As Mark Twain said; "History doesn't repeat itself, but It often rhymes”

[richfool]

What put me off FGT was, amongst other things, the manager holding onto Pearson too long, some years back.

[Humeau]

Even Nick Train's Global Equity Fund has 35.61% in UK companies. I'm less than convinced that such a high percentage will bring something like optimal performance, especially with underperformers such as Pearson and Sage.

The latter looks to be in long term decline. Terry Smith sold IMB at about 30 quid. It is around half that now and touched 12 quid last March. Don't be surprised if Sage suffers a similar decline. Smith made his name spotting wrong'uns. Intuit and Xero are from stronger companies and competition in this sector is increasingly global.

I don't think the likes of FB, Intuit and Adobe, are going to disappear any time soon and these are the sort of companies which would give Train's Global Fund a better long term performance.

[Aminatidi]

Just to add Fundsmith sold Sage.

Pearson is in Lindsell Train Global Equity but Sage isn't.

[HillManMill]

Just spotted this update [end May 21] on FGT from Nick:

https://www.youtube.com/watch?v=Hui_O7qil7A&t=4s

[Dod101]

Just spotted this update [end May 21] on FGT from Nick:

https://www.youtube.com/watch?v=Hui_O7qil7A&t=4s

This looks suspiciously like the subject with which I started this thread. baldchap on 4 June kindly provided the same link I think..

Dod

[monabri]

FGT hasn't performed that well over the last 5 years....compared to, say, Merchants or Law Deb .

Comparison of Total Returns over the last 5 years made using Hargreaves Lansdowne's website tool.

https://www.hl.co.uk/funds/fund-discoun ... ion/charts



Three quite different Investment Trusts with LWDB currently out in front and MRCH currently pipping FGT.

[Itsallaguess]

https://i.postimg.cc/2yn9XcbL/Screenshot-20210607-105019-Chrome.jpg

Three quite different Investment Trusts with LWDB currently out in front and MRCH currently pipping FGT.

But isn't that a really interesting chart because it shows the sort of performance cross-over that can often happen with these types of collective investments?

Take another look, where we split the chart around November last year, and where we can see Law Deb having experienced a period of relative under-performance at that point, and then the performance cross-over occurring from that point -



I'm not particularly highlighting FGT as a good investment here - I'm simply saying that some of the negative things being said about it on this thread could well have been said in exactly the same way against Law Deb last November, and the evidence is there as to why that might have been a missed opportunity regarding Law Deb at that point....

Source - https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/f/fundsmith-equity-class-i-accumulation/charts

Cheers,

Itsallaguess

[Dod101]

I think all we are showing is that every dog has its day. If you can identify these crossover points, very good; otherwise you can only do what I do and pick a trust that has the characteristics you like and stick with it. It is the same with the actual holdings within the trust. Not all are going to shine at the same time and in a fairly concentrated portfolio, shortfalls or otherwise will show up more than in a much broader portfolio.

Dod

[simoan]

I'm not particularly highlighting FGT as a good investment here - I'm simply saying that some of the negative things being said about it on this thread could well have been said in exactly the same way against Law Deb last November, and the evidence is there as to why that might have been a missed opportunity regarding Law Deb at that point....

Cheers,

Itsallaguess

iag, thanks for adding some sanity to the discussion. The boards here seem full of short sighted types wearing their 20:20 hindsight glasses currently

What the graph shows clearly is the low volatility of FGT compared to the others. This is exactly what some people are looking for. It is a high conviction IT with only 24 holdings and yet it has lower volatility than trusts that have many more holdings. I suspect when the market does tank next time, it's defensive plodding approach will outperform and hold up far better than the market as a whole.

As such, your view of FGT really depends on where you are in your investing lifetime, and most importantly your appetite for risk and volatility. Some of us have already "won the race" and all we can do from here is to lose a winning position. In that case a low risk, low volatility, collective investment like FGT that holds high quality compounders is just the ticket.

All the best, Si

[Dod101]

I'm not particularly highlighting FGT as a good investment here - I'm simply saying that some of the negative things being said about it on this thread could well have been said in exactly the same way against Law Deb last November, and the evidence is there as to why that might have been a missed opportunity regarding Law Deb at that point....

Cheers,

Itsallaguess

iag, thanks for adding some sanity to the discussion. The boards here seem full of short sighted types wearing their 20:20 hindsight glasses currently

What the graph shows clearly is the low volatility of FGT compared to the others. This is exactly what some people are looking for. It is a high conviction IT with only 24 holdings and yet it has lower volatility than trusts that have many more holdings. I suspect when the market does tank next time, it's defensive plodding approach will outperform and hold up far better than the market as a whole.

As such, your view of FGT really depends on where you are in your investing lifetime, and most importantly your appetite for risk and volatility. Some of us have already "won the race" and all we can do from here is to lose a winning position. In that case a low risk, low volatility, collective investment like FGT that holds high quality compounders is just the ticket.

All the best, Si

Thanks Simoan. That pretty well sums up my feelings about FGT I must say.

Dod

[LittleDorrit]

The other aspect of low discount volatility, is that that the z score appears to be a less relevant signal to an investor than for truly volatile trusts.
The quite extreme z score of -3 for this trust may be mathematicaly correct, but a swing fom a 2% premium to a 1% discount is hardly a life changing opportunity.

[simoan]

Thanks Simoan. That pretty well sums up my feelings about FGT I must say.

Dod

I must admit I'm getting tired of reading the comments of those where the only metric is return on investment without any consideration of the risk taken to achieve it, whilst also looking in the rear-view mirror. This is novice investing. I find myself biting my tongue a lot i.e. not posting .

And volatility, ne'er gets a mention... You only need to read these boards when the market goes down a few percent to see the gnashing of teeth that a very small amount of market volatility causes, which makes it pretty obvious many do not even consider the volatility of their holdings, or at the very least that holding low volatility investments is much better for achieving a good night's sleep!

All the best, Si

[Aminatidi]

I'm going to borrow something I posted on another forum yesterday that highlights this quite well albeit relating to Fundsmith.

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[monabri]

There was plenty of volatility in FGT in March 20.

[Spet0789]

I'm going to borrow something I posted on another forum yesterday that highlights this quite well albeit relating to Fundsmith.

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Interesting charts, and absolutely correct to highlight the important of return per unit of risk.

But by that measure (taking for example the Calmar Ratio, Return / Maximum drawdown) some of the other funds have done a lot better than Fundsmith (MS Global Opportunity for example).

So something like 70:30 of that fund and cash would have delivered higher returns than Fundsmith with lower volatility and drawdown.

I am a Terry Smith fan btw, but this analysis is quite simplistic.