Edison issues review on Finsbury Growth & Income T

London, UK, 10 December 2018

Edison issues review on Finsbury Growth & Income Trust (FGT)

Finsbury Growth & Income Trust (FGT) has a distinguished track record of outperformance - its NAV total returns are above those of the FTSE All-Share index benchmark over one, three, five and 10 years. It also ranks first over these periods when comparing its performance with that of its 10 larger-cap peers in the AIC UK Equity Income sector. Manager Nick Train highlights the trust's 7.7% dividend growth in FY18, which was fully covered by revenue. He says this growth rate is very encouraging compared to the much lower levels of UK inflation and interest rates, and illustrates the strong cash flow being generated by portfolio companies, which he argues should continue to support FGT's annual distributions.

FGT is trading at a 1.4% premium to cum-income NAV, which is towards the high end of the range of the last five years (1.6% premium to a 1.5% discount). The board actively issues shares when there are unfulfilled buy orders in the market. As a result of strong investor demand, in FY18 the number of shares in issue increased by 22.0%. FGT has a progressive dividend policy, aiming to grow the annual distribution at a rate higher than UK inflation; its current yield is 2.0%.

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