Finsbury Growth & Income Trust flags disappointing FY performance

(Sharecast News) - Finsbury Growth & Income Trust said on Wednesday that its performance over the year to the end of September "has again been disappointing" as it underperformed its benchmark index. For the year, the share price total return was 2.3%, underperforming the FTSE All-Share Index, which returned 16.2%. Meanwhile, the company delivered a net asset value total return of -0.1%, compared to +8.2% in the previous year.

Due to an extended period of underperformance, Finsbury said it has subjected the portfolio manager's investment process and the resulting portfolio holdings to "close scrutiny".

"We remain confident in the long-term investment process, which focuses on high-quality, cash-generative businesses with durable competitive advantages," it said.

"While many of our portfolio companies are listed in the UK, they are, in reality, global businesses with leading positions in their respective industries. We share the portfolio manager's belief, both in the quality of these companies and in the belief that this quality will, ultimately, be reflected in their share price performance."

The trust pointed out that a highly concentrated portfolio means higher risk, particularly in the short-term.

At September end, its active share - a measure of how much it varies from the FTSE All-Share Index benchmark - was 86.4%, versus 84.1% in 2024.

"Such an uncorrelated portfolio will inevitably perform very differently from the wider market, whether positively or negatively," it said.

Finsbury also said on Wednesday that for the first time in its history, this year's annual general meeting will include a continuation vote as it looks to give shareholders the opportunity to decide whether it should continue with its long-term investment approach.

Chairman Pars Purewal said: "During the year, I, together with the senior independent director, met with several of our largest shareholders. While there was shared disappointment regarding the company's recent investment performance, I am encouraged to report significant support for the continuation of the company from amongst shareholders we spoke with."