London, UK, 22 February 2022
Edison issues review on Finsbury Growth & Income Trust (FGT)
Finsbury Growth & Income Trust (FGT) is managed by Nick Train, one of the founding partners of boutique investment firm Lindsell Train. He is optimistic on the current outlook for UK equities, all the more so given several years of relative underperformance; in particular, the manager believes that global investors are underestimating the level of technological innovation within the UK corporate sector. While FGT's relative performance has lagged that of its peers and the UK market in recent months, a period that followed positive COVID-19 vaccine news last November, Train has a very commendable long-term record. This has been achieved by following a buy-and-hold strategy, focusing on specific sectors and a select number of companies that he believes have superior long-term earnings and dividend growth potential as a result of their unique brands and franchises.
While FGT's FY20 dividend was maintained at 16.6p per share due to a lower level of income as a result of the coronavirus, over the last five years the annual distribution has compounded at a very respectable rate of 6.5% pa. The trust offers a 1.9% yield and has revenue reserves of c 1.1x the last annual dividend. FGT's board actively manages the trust's discount/premium; its shares are currently trading at a 1.6% discount to cum-income NAV, which compares to a 0.0% to 0.4% range of average premiums over the last one, three, five and 10 years.
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