Finsbury Growth & Income buys more Fevertree shares

Finsbury Growth & Income has outperformed the market for the first time in months after a number of its top holdings saw a turnaround in performance. 

In a cheerful update, manager Nick Train said that his £2billion trust delivered a NAV per share total return of 8.1 per cent in July, nearly double the FTSE All-Share, which was up 4.4 per cent. 

The popular investment trust’s share price rose 10.6 per cent in the month, with many of its ‘growth’ stocks seeing a rebound after a torrid first half.

Experian led the portfolio’s big gainers, with shares up 19 per cent, followed by french spirits group Remy Cointreau, up 14 per cent, and asset manager Schroders, up 11 per cent. 

Diageo, whose share price fall had left Train ‘perplexed’ in June, saw a rebound, with shares up 10 per cent.

‘Consumption of premium spirits is growing, and this is likely to enhance the profit margins of the lucky owners of premium spirits brands,’ Train said.

Software group Sage also saw a 10 per cent uplift, while luxury fashion group Burberry and analytics firm Relx each enjoyed a 9 per cent rise in their share price. 

Hargreaves Lansdown, which has seen its share price fall by around 28 per cent this year, soared 7.5 per cent, along with Unilever.

Train said all of these stocks had been weak in 2022 until July, despite delivering in-line or better than expected results, but had been hammered by the ongoing war in Ukrainer and rising interest rates. 

Finsbury Growth & Income has outperformed the market for the first time in months

‘With the possible exception of Hargreaves Lansdown, I think it true that all of the above have delivered in-line or better than expected results in 2022,’ he said.

And added: ‘I wish we had sufficient insight into these geopolitical and macro-economic uncertainties to make investment calls that were certain to add value for our clients. But we don’t. 

‘And therefore can’t think of anything better to do than to keep your portfolio fully invested in a collection of companies that earn high and defensible returns on capital and offer participation in a secular growth opportunity.’

Aside from sticking to growth stocks, Train said he had loaded up more Fevetree shares as the upmarket tonic maker slumped another 12 per cent, making it the worst performer in the portfolio in July. 

Last month, the company slashed profit forecasts after seeing transportation and glass costs rise.  

But Train said he was pleased with Fevertree’s decision not to hike prices to consumers, cutting marketing spend or limiting supply to the US. 

‘It would’ve been easy for the company to do any of these things and, possibly to have been applauded for doing so,’ he said. 

‘But investors like us in FEVR want as many US consumers to experience and become converts to FEVR’s superior products as possible. 

‘Because that is likely to drive most equity value over time.’

Finsbury Growth & Income trust’s top ten holdings list features many household names