InvestmentsMay 17 2013

Train ‘flabbergasted’ at 25% share rise

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Nick Train has said he was “flabbergasted” after his portfolio saw a share price rise of 25.1 per cent in the six months to March 31.

The Finsbury Growth & Income trust saw its net asset value per share rise 26.7 per cent, compared with a 14.5 per cent rise for the FTSE All Share index, according to the trust’s half-year results to March 31.

Mr Train, co-founder of Lindsell Train and manager of the £346.6m investment trust, moved to reassure investors that he could still find quality companies that were not too expensive.

“The big winners for the strategy over the period are fine businesses – Heineken, Unilever, Diageo, Daily Mail and Schroders – all long established and high profit-margin companies”, he said.

“As to when ‘quality’ companies become overvalued, we say that when or if price-to-earnings ratios of more than 30x are recorded, there is a risk that even the most exceptional companies may have become strategically overvalued.”

Mr Train said while he was eyeing up candidates for new investment he was waiting for the right entry point, and at the moment he had “no intention” of changing the portfolio’s profile.

“We are not about to sell any part of any existing holding and at today’s prices, we have no actionable new ideas,” he said.

Thematically, the manager is looking for companies that can expand through the use of digital technology, such as Pearson.

The trust’s shares have been trading close to the net value of its assets throughout the half year. The board announced a first interim dividend of 4.8p per share, an increase of 4.3 per cent on last year.