Finsbury Growth & Income Trust PLC admits the hare is currently outpacing the

Finsbury Growth & Income Trust PLC (LON:FGT) has underperformed the market since news of the coronavirus (COVID-19) vaccines started to influence sentiment, its portfolio manager admitted.

The fund’s net asset value rose 1.1% on a total return basis (i.e. including dividends) in March, while its benchmark index (the FTSE All-Share) was up 4.0%.

The portfolio manager, Nick Train, told shareholders that while the UK equity portfolio outperformed in 2020, proving defensive in difficult circumstances, things started to unravel around the time of the vaccine announcements in the fourth quarter of 2020 and this has continued into 2021.

“Simply stated – having held up during the worst of 2020, our returns have lagged as economic and investor confidence recovered,” Train said.

Train held up consumers goods giant () as representative of the fund’s performance.

The stock was a haven for investors throughout the March – December period in which the pandemic was a major influence on market sentiment, and actually notched up a small rise in 2020; in 2021, however, Unilever’s share price has fallen 7% while the UK stock market has risen by more than 5%.

In short, the defensive nature of Unilever is no longer appealing to investors, in the short term at least, with investors off chasing recovery plays in the banking and oil sectors.

“Looking at other drab performers in the portfolio in Q1 confirms this analysis. Heineken, and even Fever-Tree all fell. Their booze and chocolate joining Unilever’s soap and ice-cream. These just do not seem exciting investment propositions – at least for now,” Train conceded.

As you might expect, Train’s commentary had a caveat.

“Of course, a look at the longer-term share price performance of these companies is a useful reminder that the sort of steady, predictable growth they offer is very valuable for investors. All the holdings mentioned in this paragraph have done well for your portfolio over time and we hope will do so again,” Train said.

The portfolio manager was also at pains to make clear the entire portfolio was not made up of what some might uncharitably term “steady plodders”. The fund’s long-term holdings in Burberry, Daily Mail, Diageo, Rathbones, Sage, and Young’s all saw encouraging share price gains.

Just don’t mention the (LON:LSEG), which has tumbled from just above nine quid at the end of 2020 to 7,894p now; that alone hit the Finsbury portfolio’s performance by 2% in the first quarter of 2021.