The trust has outperformed the 19 other IT UK Growth and Income portfolios over the past decade, which Train (pictured) attributes to his "buy and hold" strategy and simple approach to stock picking.He said: "I sit on the board of a number of charitable organisations and interview fund managers, and 18 out of 20 of them spend all their time talking about the eurozone and the various short-term macro events and I just think – how is this going to make me money?"
"You see a lot of presentations from fund managers and they go into incredible detail on geography, industrial sectors and so on – in one presentation on Diageo we were told about the growth of the Hispanic population in the US, for example and the effect it would have."
"But we just hold Diageo because we think people will be drinking Johnnie Walker in 100 years."
Train says that ruminating on current macro-economic events can quickly turn into excess pessimism and overactive trading.
"There’s clearly a lot of unhelpful behaviour by market participants. All academic statistical evidence confirms that the most certain way to achieve disappointing results is to be too active a trader."
"The pressures to trade are very intense. Private investors feel that unless they’re trading they are not doing their jobs and clients a service."
"People over-estimate their ability to add value by trading – just as surveys show 90 per cent of people think they are an above-average driver – and they think their clients expect them to be doing smart things," he added.
"This has a serious effect on returns. You might think saving 1 per cent a year is not a lot, but that’s money that goes back into the portfolio and compounds."
The Finsbury Growth & Income Trust, which has five FE crowns, is a highly concentrated portfolio of around 30 stocks, which data from FE Analytics shows has beaten its sector average in seven of the last 10 years.
The last three years have been particularly successful for the fund, with the portfolio more than doubling the returns of the FTSE All Share in the two up-markets of 2010 and 2012, and managing to turn a 4.06 per cent profit in 2011 when the index fell 3.46 per cent.
Performance of fund vs sector and index over 3-yrs
Source: FE Analytics
Train looks for mature companies with long-term growth potential and has a bias to those that are using new, digital technologies to revamp their processes.
"If you think about what has created wealth over the last couple of hundred years, it has been technological change leading to productivity gains."
"Relative to the momentum of human ingenuity, the rate of interest rates or inflation or government deficits is not relevant."
"If you look back over blocks of time and ask why a capital market has moved higher by 20 per cent, it’s not things like government policies or macro-economics."
Train is scathing about claims that stock pickers must suffer in the current sluggish economy, and says that an optimistic resolve to always look for the stocks with growth potential has served him well and helped him avoid selling out of strong companies.
"Everybody always says it’s difficult for stock pickers. They were saying in 1994 it’s difficult to make money in equities, they were saying it in 2004 and I’m sure they will be saying it in 2014."
"In about 1994 I decided that I was going to be a structural bull on equities whatever happens, for a number of reasons, some of them emotional and some of them rational."
"I had observed that equity investors among peers who were bearish tended not to be as successful as the optimistic."
He is also dismissive of the trend of ignoring the UK market in favour of funds with a global remit.
"I do rail against this a bit, and this is partly me being a dinosaur railing against people taking money out of the UK."
"I do really question whether people who are selling out of the UK market to go global really understand what they are doing or what they are selling out of, because the FTSE All Share is one of the most global stock markets in the world already," he said.
"The data is quite difficult to pin down, but according to Morgan Stanley over 70 per cent of the revenues on quoted companies in the UK are from outside the country."
"You may be selling companies that are gaining you those emerging market revenues with dividends and strong corporate governance."
"Our UK strategies are 75 to 80 per cent outside the UK, so in buying our UK strategies you are only getting 20 per cent from within the country."
Train says the long-term outlook for equity investors is positive, if they have the time and the stomach to wait.
"We would expect our stock markets to be much higher in seven to 10 years’ time than they are today."
"We would expect markets to be driven by new companies and perhaps new industries – it may be that many companies and industries don’t participate in that, of course, and that’s a challenge for us."
"We definitely never invest in start-ups or speculative businesses, however. We are definitely not going to be in the new Google, for example, even if I think markets will be led by the new Google."
Finsbury Growth & Income has a total expense ratio of 1 per cent, and is on a premium of 0.3 per cent, according to data from the AIC. It is yielding 2.56 per cent.