The cynical bunch that they are, journalists and analysts relish the sound of a fund manager apologising for a run of poor performance. And they have certainly had their fill in recent days, the latest being Nick Train "acknowledging and apologising" for Finsbury Growth & Income's (FGT) shares lagging the FTSE All-Share.
The trust’s latest half-year report includes the board saying it takes such underperformance “extremely seriously” but also adding that it still believes in the underlying portfolio and its potential to deliver the goods. But if there’s an element of continuity there, it’s worth asking what explains the fund’s underperformance and how Train is responding.
Back in 2021, I wrote about Lindsell Train's Global Equity Fund (IE00B3NS4D25) underperforming during the pandemic because it lacked the tech and high-growth companies that had performed so well in the lockdown era. It also had no exposure to the cyclical shares that prospered later on. In the words of one commentator at the time, the fund was simply invested in "the dullest part of the market", due to its focus on resilient businesses with established brands.