Nick Train investment trust survives continuation vote

Shareholders in Finsbury Growth & Income (LSE:FGT) have given manager Nick Train a vote of confidence, with the investment trust convincingly passing its continuation vote.  

Train, one of the UK’s most high-profile fund managers, has underperformed the UK stock market for five consecutive years. Train abstained from voting his shares, alongside Michael Lindsell. Both founders of fund firm Lindsell Train fully supported the investment trust continuing in its present form.

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Shareholders gave their backing, with 97.2% of those who cast their votes pledging support for the investment trust to continue in its present form.

As a result, Train, who has managed the 100-year old investment trust for 25 years, will continue with his investment process of targeting well-established growth companies that are dominant players in their respective industry or sector. Such companies typically have big brands, intellectual property, and captive customers due to providing essential products or services. Such companies are categorised as high-quality growth stocks.

Train, who has repeatedly apologised for underperforming the UK market and most rival funds over the past five years, is up 6.4% in share price total return terms versus 60.4% for the Association of Investment Companies (AIC) UK Equity Income sector.

It has also hit his 10-year performance track record. Figures from Morningstar show that Finsbury Growth & Income’s share price total return over this period is 83.6% compared to 126.2% for the UK Equity Income sector.

In a video interview with interactive investor last February, Train explained that some of his previously successful holdings, such as Diageo (LSE:DGE), had become “subsequent disappointments”.

Train runs a concentrated portfolio, of around 20 to 25 shares, and the top 10 positions account for 86.7% of the portfolio. Therefore, performance is heavily influenced by its largest positions. Its top three positions, which account for a third of the trust, are Sage Group (LSE:SGE), Experian (LSE:EXPN), and London Stock Exchange Group (LSE:LSEG). Its sixth-largest position is Diageo, which accounts for 8.9% of the portfolio.

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Train is a buy and hold investor who seldom trades. However, he has been more active than usual over the past year or so, introducing new holdings Auto Trader Group (LSE:AUTO), Games Workshop Group (LSE:GAW), Intertek Group (LSE:ITRK) and Clarkson (LSE:CKN).

Over his 25-year tenure Train has comfortably outpaced the market, with figures to 31 December 2025 showing a share price total return of 706.4% versus 328.3% for the FTSE All-Share Index. The net asset value (NAV) return over this time period is 628.1%.

The continuation vote was a clear litmus test to allow investors to pass judgement on the high-conviction and quality-first investment process that Train has patiently followed for more than two decades.

If the continuation vote had failed, the investment trust’s board would have been compelled to consider alternative options for how the trust is managed, which could have resulted in the removal of Train as manager.

Continuation votes are a permanent feature for some investment trusts, occurring once a year or every two, three or five years. 

In other cases, a continuation vote is triggered if a trust persistently performs poorly or has long periods where it has traded on a wide discount. The former usually leads to the latter.

In addition, a continuation vote can be called by disgruntled shareholders. Under the Companies Act 2006, the required percentage of share capital that must be held by a group of shareholders to be able to requisition a general meeting is 10%. 

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Two high-profile examples of investment trusts that failed continuation votes were Schroders Capital Global Innov Trust Ord (LSE:INOV), formerly known as Woodford Patient Capital, and JPMorgan Global Core Real Assets Ord (LSE:JARA). In both cases disappointing performance led shareholders to act.

Continuation votes are one of the features that distinguishes investment trusts from funds. In addition, investment trusts have independent board of directors. It is the board’s job to exercise independent oversight, hold fund managers to account (including the ability to sack them) and look after the interests of shareholders, such as by driving down costs.  

As a shareholder in an investment trust, you have the same voting rights as shareholders in other companies. This gives you the opportunity to have your say and exert influence.

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• Read: Shareholder voting: how you can make a real difference

With funds, you don’t get much of a say, and if you are unhappy with how the fund is investing or performing, pretty much your only option is to vote with your feet.