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Welcome to Morningstar. I'm Holly Black. With me is Nick Train. He manages the Finsbury Growth and Income Trust. Congratulations. Good morning, Holly. How are you doing? So, for those who don't know, although I'm sure many have heard of this foundation, could you briefly tell us what it does ? Finsbury Growth and Income Trust is a British equity investment fund.
Its goal is to outperform the FT All-Share Index over the long term. I have been responsible for the investment activities of this company for almost 20 years. This is the longest period of work in my career. And yes, we are quite proud of the company's long-term performance . So you've been running it for 20 years, how does this year compare to others?
It was a pretty tough year for orientation. But the fact is that if you look at the share price of Finsbury Growth and Income Trust from the beginning of the year to today, it has decreased by 5%. This is compared to our benchmark, which I mentioned earlier—the FTSE All-Share Index. It has fallen by about 19% since the beginning of the year .
Of course, I'm not at all happy that we're in the red, but it's clear that our approach to investing helped protect some of the value for our investors in 2020. And I'm glad we can report this. I think the key word in the fund's name is income, and this year was a year of dividend cuts. So how do you look at it now?
Yes, this question hits right on the mark. Let me give you some statistics. If you look at the Finsbury portfolio, 14% of its value has been cancelled altogether by dividends. They are not paying dividends this year. Another 6% of the portfolio saw their dividends cut slightly. Yes? But this means that 80% of the Finsbury portfolio either maintained or even increased its dividend payout in 2020.
And this, to me, means two things. First, as I have already emphasized, the relative stability of stocks indicates that we are investing in strong companies, as evidenced by the fact that 80% of them have maintained or increased their dividends. Another thing is that just two or three days ago, Finsbury announced the payment of dividends, its own dividends, for the period until the end of September.
So, Nick, you are known as a buy-and- hold investor. You really hold the stock for a long time. Is this investment approach a challenge in a year that is so volatile or where things are changing very quickly? You know, the short answer is no, but that doesn't mean it's right not to change anything. Do you understand what I mean?
But, you know, we have a set of investment principles, and we've been very clear: Michael Linsley and I outlined them when we founded the company 20 years ago , and we adhere to them completely . And one of the principles is that excessive trading and changing horses at the crossing, if you will allow me to use that metaphor, does not benefit investors in the long run.
It is better to have a very patient approach to the challenges of investing in stocks. And we just stuck with it this year. Ahem. You know , that's interesting. When I look at what worked for us in 2020. The investment decisions or choices regarding companies that we made about 15 years ago have worked.
It's not that we suddenly changed our minds and decided on January 1, 2020, that what I'm about to talk about is a good idea. These are deep-rooted long-term investment ideas. So, obviously, this is such an obvious thing, and it's true all over the world: what worked this year, what really grew, were companies with a solid digital strategy.
You see what Nasdaq has done this year, the IPOs of these tech stocks only confirm this. Finsbury's largest asset is the London Stock Exchange. The London Stock Exchange is clearly one of the best digital analytics and data companies in the UK stock market . It may not be perceived as a technology company, but in reality it is , and that is how it operates.
And it has grown this year. So, that's good. We have owned it since 2004. You know, the idea itself hasn't changed. So it was these kinds of long-term ideas that worked well. Nick, thank you very much for your time. For Morningstar, you had Holly Black with you .
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