Finsbury Growth and Income

[Dod101]

There probably is another thread somewhere but I cannot be bothered to look.

In a recent video, Nick Train, the manager, noted that the FTSE All Share Index is up by 9.7% in the first quarter 2021 against the Trust's 5.7% or something like that. Anyway, the Trust was uncharacteristically lagging the All Share. Believe it or not, he suggested that it may be that the FTSE increase is down to technology driven innovators in the UK market.

He then of course talked of the successful compounders they hold such as Unilever, RELX and so on. I noted especially that apparently Unilever is up 16 times in the last 33 years whereas the FTSE All Share is up only 4 times.

Worth listening to even if Nick Train gets ever more eccentric in his delivery. I like his philosophy.

Dod

[HillManMill]

Hi Dod,

Thanks for highlighting this. I would be interested to take a look. Could you post a link please?

[baldchap]

https://www.youtube.com/watch?v=Hui_O7qil7A

[Dod101]

Believe it or not, he suggested that it may be that the FTSE increase is down to technology driven innovators in the UK market

Did he name any names, or was it a more general comment?

Joey

I don't think he did but you might like to click on the link kindly provided by baldchap. Go back to the beginning and take it from their. His presentation was I think better than the Q & A session.

Dod

[bluedonkey]

I see what you mean about Nick Train's rather eccentric delivery. It's as if he recorded it at three in the morning.

[nmdhqbc]

https://www.youtube.com/watch?v=Hui_O7qil7A

i suggest a playback speed of 1.5, maybe 1.75 if you're short on time.

[Avantegarde]

For the past year or so FGT has clearly lagged the growth of the FTSE all-share index (up 7% compared to +18%). I cannot sort out in my own mind if this is a blip, or the start of a new trend for FGT, which would prompt me to sell by holding.

[baldchap]

For the past year or so FGT has clearly lagged the growth of the FTSE all-share index (up 7% compared to +18%). I cannot sort out in my own mind if this is a blip, or the start of a new trend for FGT, which would prompt me to sell by holding.

Z score (if you take stock of such things) is currently about -3.
So a good time if you believe they are about to buck the trend...

[Dod101]

For the past year or so FGT has clearly lagged the growth of the FTSE all-share index (up 7% compared to +18%). I cannot sort out in my own mind if this is a blip, or the start of a new trend for FGT, which would prompt me to sell by holding.

Z score (if you take stock of such things) is currently about -3.
So a good time if you believe they are about to buck the trend...

I have no idea what this means but I will stick with Nick Train's choices. I think most of them are shares for all seasons and they will be good for at least my future. What they have is an inbuilt culture for success.

Dod

[baldchap]

I agree Dod. Quality holdings worthy of a global IT.

I am sure you know , but for those that don't, Z score is basically a measure of the deviation of the current price/premium from the standard over the last 12 months.
So 0 would be standard, +2 expensive etc. Anything below -2 is usually considered very cheap and more commonly seen with volatile IT's, not FGT.
So, not a reason to buy on its own, but certainly an indicator of a good entry point if it is something on your watch list.

[Itsallaguess]

for those that don't know, Z score is basically a measure of the deviation of the current price/premium from the standard over the last 12 months.

So 0 would be standard, +2 expensive etc. Anything below -2 is usually considered very cheap and more commonly seen with volatile IT's, not FGT.

So, not a reason to buy on its own, but certainly an indicator of a good entry point if it is something on your watch list.

I like to keep a watchful eye on a large group of IT z-scores and discounts, and as well as having an interesting z-score at the moment, the discount FGT is now bordering on is also in the sort of territory that it doesn't hang around in for very long either, as can be seen from the 5-year chart below, so I think I may dip my toe in with some of my 'medium term capital growth' cash that I like to have a play with when opportunities like this crop up -




Source - https://www.trustnet.com/factsheets/t/fd89/finsbury-growth-&-inc-tst-plc

At a dividend yield of 2%, it's a little low for my main income-portfolio, but with these types of IT-related opportunities, if I can grab a medium-term capital-growth yield on top of that and then rotate that capital into a slightly higher-yielding longer-term holding later on, hopefully when at least year's worth of dividends have also been received, then that would generally be the sort of round-trip 'opportunity' that I like to look for with this particular lump of capital that I like to segregate away from my main, LTBH income-focussed portfolio...

Cheers,

Itsallaguess

[Dod101]

To be honest whilst I am not knocking stuff like the Z score, I think most of us can see this sort of thing anyway. If buying for the long term trying to pick the best entry point is not that important although of course all the better if you can pick an advantageous one. For IAAG's point it is obviously important.

I noted from the video that Pearson had done much better in recent months but that LSE had fallen away quite sharply. In a concentrated portfolio, any one poor performer is going to have a significant effect. The other shareholdings were doing fine as I recall.

Dod

[MaraMan]

Very interesting, thanks for starting it off Dod. I have had a chunk of my SIPP in FGT for a few years and have been unimpressed by it's recent performance, especially when compared to SMT and Monks which I also have in there. However I am conscious that every dog has it's day and I feel that the UK markets will have a good year. While I don't plan to sell my FGT holding I am reluctant to add to it at the moment. I have a UK FTSE 100 tracker in my ISA which I have been mulling over as I read recently that somestock pickers have historically outperformed the trackers in the UK, or at least more of them have than might expected.

MM

PS - the slightly bizarre performance by Mr Train in his presentation has done little to ease my nerves to be honest.

[EssDeeAitch]

Not sure why a trust that has underperformed VWRL over 6 months, one, three and five years would have any appeal whatsoever.

[Dod101]

Not sure why a trust that has underperformed VWRL over 6 months, one, three and five years would have any appeal whatsoever.

What has World Wireless Communications got to do with it?

In any case until the last year or so Finsbury Growth and Income has bettered the FTSE all Share which is I think a fairer comparison, considering that it is a mainly UK oriented trust.

Dod

[Dod101]

Not sure why a trust that has underperformed VWRL over 6 months, one, three and five years would have any appeal whatsoever.

What has World Wireless Communications got to do with it?

In any case until the last year or so Finsbury Growth and Income has bettered the FTSE all Share which is I think a fairer comparison, considering that it is a mainly UK oriented trust.

Dod

VWRL = Vanguard World Tracker ETF?

RVF

OK I was being a bit provocative but even so how can you compare a worldwide tracker's outcome with an IT which is basically a UK oriented fund?

It sounds to me as if EssDeeAitch is comparing apples with oranges.

Dod

[Humeau]

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.

[Itsallaguess]

Not sure why a trust that has underperformed VWRL over 6 months, one, three and five years would have any appeal whatsoever.

Well one reason might simply be a view that one investment might be currently under-priced, and the other currently over-priced...

I'm not particularly saying this is the case here with your FGT / VWRL comparison, but I'm just offering that explanation up as to why a particular situation 'might appeal', if indeed someone took the view that this might be the case...

Cheers,

Itsallaguess

[ADrunkenMarcus]

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

It's a shame UK investors cannot access him. One trick I sometimes pull is looking at managers' top holdings and then I sometimes buy them directly.

Best wishes

Mark.

[77ss]

....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.