What’s the state of play for Nick Train?

Quality investing has been through the mill - and the recovery certainly remains elusive for now.

That’s clear enough from the performance of the two best-known quality-focused managers out there.

Terry Smith’s Fundsmith Equity I Acc has lost 6.3% so far this year, versus an 8.5% positive return from the MSCI World index.

Nick Train’s Finsbury Growth & Income Ord has seen its shares slide by more than 9% in a period where the FTSE All-Share index has returned around 4%.

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A natural response to this continued poor performance might simply be to bail out, but those investors who stick with such funds will at least want to keep an eye on how such portfolios are developing.

And in the case of FGT plenty has already gone on beneath the surface so far in 2026, even if Train himself is famous for his buy and hold approach.

FGT is also still an extremely concentrated portfolio, with around 86% of its assets in the top 10 holdings.

That translates into plenty of stock-specific risk, and recent developments could therefore have a major impact on the portfolio.

Consumer shifts

There are important developments on this front, and it’s worth starting with some of the names higher up in the list of holdings.

The portfolio may have shifted to technology-enabled businesses in recent years but there is still a good slug of exposure to consumer stocks.

This remains a sector in flux, thanks to factors such as changing alcohol consumption habits to name one, and we have seen some developments that are worth monitoring.

To kick off, Unilever, which accounts for around a tenth of the fund, announced at the end of March that it had entered an agreement to combine its foods business with McCormick.

This deal originally caused some unrest among investors, in part because of its complicating effect.

It would create a food brand company in which Unilever shareholders would have a substantial stake, but the argument runs that Unilever itself would be able to focus on the beauty, well-being, personal care and home care sectors.

It would, in the company’s own words, reshape Unilever into a “simpler, sharper, higher-growth company built upon synergistic capabilities across science-led innovation, demand creation and operational execution”.

Putting all that corporate jargon aside, Unilever does argue that it has delivered superior performance versus the home and personal care (HPC) sector in the last three years.

But this does change its profile. It’s worth noting that Fundsmith Equity exited its Unilever position in April, although the team has not yet elaborated on its reasons.

Nick Train used a March update for FGT to make the case for the deal.

As he put it: “This is a classic transaction of its type – creating value, we hope, for both sets of shareholders.

“Unilever shareholders receive a premium valuation for the food division and participate in the cost savings and growth opportunities that will present to the combined and single-focused food business.

“Meanwhile, it seems realistic to expect ‘new’ Unilever to both grow more quickly and command a higher rating, as it shrinks itself into a pure-play HPC company.”

Sticking with consumer goods, all eyes are still on Diageo, which accounts for 8.7% of the fund.

Investors will be waiting to see if Dave Lewis can turn it round, and it’s notable that a number of senior executives have just left the company.

Bids, bids, bids

We also need to remember that Train’s portfolio continues to see some bids.

Schrodersis now set to disappear from the fund via a bid from Nuveen.

Train has not given any hints about how the capital generated from the sale might be deployed but did suggest he would not back another fund management company.

“We are open-minded, currently, about what to do with the just under 8% of the portfolio held in Schroders, although the positive return it offers if held through to the completion of its takeover is certainly attractive in today’s stressed market conditions,” he said in the March commentary.

“However, it seems unlikely we will recycle the Schroders capital into another London-listed asset management company.

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Schroders’ acceptance of a bid from a US peer, despite owning the best private wealth brand in the UK in Cazenove, forces us to acknowledge that, even for the best franchises, the glory days of generalist active investment management are, at least temporarily, over.”

He, meanwhile, expects other bids in the consumer goods sector.

On the subject of bids, the board of testing company Intertek Grouphas (conditionally) accepted a bid of £60 per share from EQT.

A fairly recent addition to the fund and seen as another digital play with plenty of data, this will also free up more money for the team to invest.

Let’s talk software

A few other top 10 companies have had idiosyncratic news.

Burberry Group recently announced a profit, while Clarkson also released an upbeat trading statement.

Clarkson is worth a watch given that it focuses on “maritime services”, meaning events in the Strait of Hormuz are of direct relevance to the company.

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But another major question for the portfolio, and a broad one at that, relates to the victims of the software sell-off earlier this year.

FGT was right in the crosshairs of this, given that it lists London Stock Exchange Group, Experian, RELX, Sage Group (The) and Rightmovein its top 10.

These companies all have their own markets and idiosyncrasies, but much of FGT’s future performance does seem to hinge on whether the AI threat to these companies is real, whether it’s overstated, and whether they can recover on the back of the sell-off earlier this year.