Sorin-Andrei Dojan, Investment Week, 01 July 2024:
Finsbury Growth & Income trust manager Nick Train has criticised professional fund managers and amateur investors for often chasing the latest “hot idea”, showing no patience for stock growth.
Speaking in a weekly webinar held by QuotedData, Train argued that portfolios “never really stay stable long enough to get the benefit of a good investment”, as a result of trading too frequently.
He noted that some investors tend to overdiversify their portfolios, which can often result in unintended changes in holdings ratio.
“Suddenly [you] look up and realise, ‘I thought I was running a concentrated portfolio, but actually I have got 70% stocks now and I do not really know why I own half of them’,” Train stated. “We have disciplined ourselves to try and avoid those types of mistakes, so we keep the portfolio super focused and try as much as we can to trade and interfere with the portfolio as little as possible.”
Since the end of 2020, Train’s Finsbury Growth & Income trust has added three new stocks, reaching 20 in total. However, this took place against the backdrop of Russia’s war in Ukraine, rising inflation and an overall deterioration in market conditions.
Train acknowledged disappointment over the trust’s short and medium-term returns since the pandemic era, noting that having 20 holdings can go both ways depending on the headwinds in the financial market.
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