Investing Videos

Will Nick Train's Turnaround Plan Work?

The half‑year update of the Finsbury Growth and Income Trust (HOLY) put the spotlight on manager Nick Train’s turnaround plan after a six‑month total‑return of roughly –14% versus an 8.9% gain in the FTSE All‑Share. Train responded with three levers: a higher dividend, a more aggressive gearing policy, and a push for M&A. From October the trust will lift its yield from about 2.6% to at least 3.9% and move to quarterly, pence‑per‑share payouts. It also intends to draw more on its £100 million borrowing line, believing UK equities are undervalued and that leverage will enhance returns. The portfolio remains highly concentrated – the top ten stocks account for 85% of assets and include software‑heavy names such as LSE, RELX, Rightmove and Sage, which have suffered AI‑related sell‑offs. Train sees value in recent price lows and is watching deals like Intertek’s offer, Schroders’ bid, and potential consumer‑brand consolidations involving Diageo and Brown‑Forman. If the added leverage amplifies a rebound in these holdings and M&A activity delivers premiums, the trust could close the performance gap. Conversely, the same leverage magnifies downside risk, making the plan a high‑stakes bet for income‑focused investors.