Finsbury Growth Income Trust: Is the SaaS Sell-Off an Opportunity?

Finsbury Growth Income Trust (LSE: FGT) has taken a bruising over the past year, with its concentrated data and software holdings dragging performance well behind the FTSE All-Share Index. Whether that re-rating is deserved, or whether it opens a window, is the question investors in the FTSE 250 trust now face.

A portfolio built around data moats

The trust holds a tightly concentrated portfolio of 22 holdings, and almost 52% of assets sit in just five names: Unilever, the London Stock Exchange Group (LSEG), Sage, Experian, and RELX. Around 58% of the portfolio is allocated to data, software and platform businesses. That concentration has been the source of both the trust’s long-run outperformance and its current difficulty.

Four of the largest positions have had a torrid twelve months. LSEG has fallen 17.8%, Sage 34.4%, Experian 32.9%, and RELX 37.4%. The sell-off, which has followed broader anxiety about whether AI disrupts or simply bypasses established software vendors, has pulled the trust’s net asset value sharply lower and widened the gap to the FTSE All-Share.

The trust has been managed by Lindsell Train, the investment firm co-founded by Nick Train in 2000, since December of that year. Train brings more than 30 years of investment experience to the portfolio, and the trust itself dates to 1926. Its stated objective is to achieve capital and income growth in excess of the FTSE All-Share Index (net dividends reinvested), investing principally in UK-listed securities.

Train’s AI case for Finsbury Growth Income Trust holdings

Train has pushed back firmly on the idea that AI poses an existential threat to the portfolio. Writing recently, he argued that the core holdings ‘are much more likely to be beneficiaries from AI than victims of it.’ The rationale turns on proprietary data that is ‘constantly replenishing’: exactly the kind of material, Train contends, that ‘AI models would love to get their hands on.’

The underlying data volumes give some weight to that argument. Experian’s credit and identity files, spanning millions of individuals and businesses globally, are updated a billion times every month. RELX’s risk division processes 450 million identity checks a day. LSEG generates 15 million new data messages every second and is actively licensing that flow to AI developers. Sage, which supplies accounting and tax compliance software, is integrating AI tools into its suite; chief executive Steve Hare has called the suggestion that general AI will replace CFOs and accountants ‘ludicrous.’

Beyond the data names, Finsbury also holds positions in Diageo and Burberry, both of which have shown early signs of stabilisation, though the macroeconomic backdrop for consumer-facing brands remains difficult.

Skin in the game: how committed is the manager?

Manager alignment is where the Finsbury Growth Income Trust story has an unusual dimension. Train acquired 275,237 shares during the year ended 30 September 2025, according to the trust’s annual report, lifting his personal stake to 5.6% by April. For an investment trust, that level of direct ownership is genuinely uncommon, and it is worth setting alongside the fact that Train is also a founder and major owner of Lindsell Train itself: his economic interests run in parallel with those of FGT shareholders at two levels simultaneously.

As at 31 January 2025, the trust’s FCA-filed factsheet showed net assets of £1,536.0 million, a market capitalisation of £1,437.3 million, and a discount to net asset value (cum income) of 6.4%. The ongoing charges ratio stood at 0.6% and gearing at 1.7%. The share price at that date was 962.00p; the trust has since traded considerably lower, with the snippet-cited price of 738p implying a steeper discount than the January figure captured.

Dividend trajectory and what the numbers show

The income picture has been modest but moving in the right direction. The board declared a second interim dividend of 11.4p per share for the year ended 30 September 2025, up from 10.8p the prior year, according to an Association of Investment Companies announcement. The first interim for the year to September 2026 was set at 8.8p per share, paid on 15 May 2026, per the half-year report on Investegate. That is unchanged from the equivalent 2025 payment, suggesting the board is holding ground on the first half rather than accelerating further.

The capital structure as at January 2025 comprised 149,411,248 ordinary shares of 25p, with 75,580,055 held in treasury, giving the trust meaningful capacity to use buybacks as a discount-management tool if the board chooses to deploy it.

The investment thesis here is binary in the way concentrated portfolios tend to be. If LSEG, Experian, RELX and Sage recover even partially as the AI narrative settles into something more nuanced than outright displacement, the trust’s discount compounds the return on offer. If the re-rating proves structural, the concentration that built the long-run record becomes the liability. Train’s continued buying tells you where he thinks the balance of probability lies; the next quarterly earnings cycle for the major holdings will be the first real test of whether the data-moat argument holds.