Star fund manager Train loses on share picks in Cazoo and Manchester United

Train thinks London shares are undervalued (PA Wire)

STAR city fund manager Nick Train today admitted he has struggled for form lately, with investments in Cazoo and Manchester United among those costing his customers.

Train runs the £1.5 billion Finsbury Growth & Income Trust where performance has been poor for some time.

Although he has a strong long-term record, some in the City are asking if he has lost his touch.

Train, 65, says there is a “malaise” gripping UK shares which he feels is “only partly justified”.

The fund returned 2.7% in the half-year, while the FTSE All-Share was up 6.9%.

Train said in the statement to the City: “To be candid I find this a difficult report to write. As you will have seen from the Chairman’s Statement, this was yet another six month period when I, with my colleagues at Lindsell Train Limited, underperformed our benchmark, the total return on the UK FTSE All-Share Index. We really should be able to do better than this and if we can’t, then I absolutely share Shareholders’ growing impatience.”

While investments in the London Stock Exchange Group and Experian have been solid, others, notably in used car dealer Cazoo, which has called in administrators, have gone badly wrong.

An investment in Manchester United has been as sub-par as the team’s league performance this season.

Over five years, the fund is up just 6.4%, far below rivals. He has recently bought into Rightmove, on the basis that it is " by orders of magnitude the most visited residential property portal in the UK”.

Train continued: “Oil and Mining company shares has been a persistent drag on our performance since the world economy emerged from Covid-19 lockdowns. But in my comments here I want to focus on just one factor. To my mind it is the overarching reason we have had a tough time over the last three years. In addressing the issue, I will also illustrate how we have addressed it in terms of changes in portfolio construction and constituents.

In January 2020 your portfolio had delivered a decade of strong relative returns. But as I look back at its structure in early 2020, just before Covid-19 hit, I am struck by what now seems an obvious failing. The portfolio did not, with the benefit of hindsight, have enough exposure to companies with products and services likely to become more relevant and valuable to their customers as we proceed deeper in the 21st century. To put no finer point on it, the portfolio in 2020 did not have enough exposure to technology or companies well-positioned to exploit technology. It had some, but evidently not enough.”