Finsbury Trust Faces Further Decline as AI Disruption Sparks Market Anxiety
Nick Train's Finsbury Growth and Income Trust has experienced another difficult period, caught in the crossfire of a significant sell-off affecting data and software companies. The trust's substantial exposure to London's premier listed software firms has proven costly following the market's reaction to new artificial intelligence developments.
Concentrated Portfolio Faces Pressure
The fund maintains significant positions in several major software and data companies. At the close of 2025, Sage Group represented 12 per cent of the portfolio, with Experian at 11.6 per cent, London Stock Exchange at 11.2 per cent, and RELX accounting for 10.8 per cent. This concentrated exposure has magnified the impact of recent market movements.
Following the launch of Anthropic's legal productivity tool earlier in the week, these core holdings faced substantial downward pressure. The resulting effect on FGIT has been pronounced, with shares losing over six per cent during the week. By Wednesday's market close, the share price had fallen to 729p, marking the lowest level in nearly six years.
Analyst Perspective on the Sell-Off
Danni Hewson, head of financial analysis at AJ Bell, commented on the situation. "Train is known as a high conviction investor who maintains concentrated positions, so when multiple major holdings experience simultaneous downturns, the impact is particularly severe," she observed.
"This market correction may ultimately prove temporary and exaggerated. Some stability has returned to software services trading today, though underlying nervousness persists. The broader lesson remains clear: artificial intelligence represents both opportunity and threat, and investors must navigate this dichotomy carefully."
Challenging Period Extends for Veteran Manager
The recent decline compounds an already difficult period for Train, whose firm Lindsell Train has managed FGIT since 2000. The trust's performance in 2025 proved disappointing, with net asset value per share declining by 7.6 per cent while the benchmark FTSE All Share index rose by 24 per cent.
This marked the fifth consecutive year in which the fund failed to outperform its benchmark, raising questions about the sustainability of Train's investment approach. Despite these challenges, shareholders demonstrated continued support at January's annual general meeting, with 97 per cent voting in favour of the fund's continuation.
Manager Maintains Strategic Course
In communication with investors accompanying December's factsheet, Train acknowledged the disappointing performance while reaffirming his commitment to the existing strategy. "We made no portfolio adjustments in December, nor do we anticipate imminent changes to our holdings," he stated.
"This means investors, who are undoubtedly as disappointed by last year's results as I am, must consider whether current portfolio constituents will continue to underperform or whether 2026 will bring improvement. Essentially, any recovery will likely stem from better performance of existing holdings rather than portfolio restructuring."
Long-Term Performance Context
Despite recent difficulties, the fund's long-term track record remains impressive. Since Train assumed management at the millennium, FGIT has delivered growth exceeding 700 per cent, substantially outperforming the FTSE All Share's 317 per cent increase over the same period. This historical success provides context for the current challenges facing the veteran investment trust.
