Fantasy fund manager: Gavin Lumsden

In the AIC’s second fantasy fund manager competition, we’ve asked six journalists to select four investment trusts that they expect to perform particularly well in 2026, but would be happy to hold for the long term. Below, investment trust journalist Gavin Lumsden reveals which four trusts he’s selected and why he thinks they’re likely to do well this year.

Augmentum Fintech

Approaching this challenge, I tried to strike the right balance between attack and defence.

There is plenty of excitement at the moment around the write-up in the valuation of private company SpaceX to $800bn in December and reports of a planned $1.5tn flotation later this year, which could light a fire under the various Baillie Gifford trusts that own it. However, while SpaceX might be one exciting unquoted company there are many others. My first pick is Augmentum Fintech. This £151m market cap investment trust languishes on a 43% discount despite having never suffered a major write-down on any of its investments in its eight-year history.

Half-year results last month highlighted how its market value was wholly accounted for by cash on the balance sheet and its top four holdings in online banks Tide, Zopa, iwoca and gold storage company BullionVault. That meant its remaining 23 companies, valued at £125m, were effectively free in the share price. The shares have advanced a little since then, but at 92p are still below their 2018 launch level of 100p. It looks as though there may be a significant opportunity here which may either be realised by an improvement in markets and investor sentiment, or perhaps by shareholder action. Either way, I believe the valuation gap will close and the shares will end up higher.

Augmentum Fintech profile page

RIT Capital Partners

My colleague James Carthew, head of research at QuotedData, recently flagged up the progress being made at the £3.1bn global multi-asset fund backed by the Rothschild family.

Until three years ago, the trust’s shares traded at a premium to net asset value (NAV), stoked by investor demand on account of its record as a fund that combined good defensive qualities with exposure to exciting growth companies. After a rocky time in 2023 over concerns about valuations, it has recently been helped by a number of flotations in its portfolio. Since last April the shares have narrowed their discount to 24% but there is a growing confidence the gap may continue to narrow, which I share.

RIT Capital Partners profile page

Finsbury Growth & Income Trust

After this trust passed its continuation growth with flying colours, I’ve a hunch that its dismal five years of underperformance could be about to end. That may well just be wishful thinking, but once again I was impressed with the conviction of fund manager Nick Train in his investments in global brands and digital winners. If markets swing the managers’ way, there could be a sharp rebound in shares that have remained on a relatively narrow discount of around 5% because of massive buybacks by the board.

Finsbury Growth & Income Trust profile page 

Lindsell Train Investment Trust

If Finsbury Growth recovers, there is likely to be a strong response too at Lindsell Train Investment Trust. The £123m market cap fund is also managed by Train. It has a very similar portfolio to Finsbury, except that it also has a big stake in the privately owned fund management company founded by Train and business partner Michael Lindsell. That’s made it a volatile and leveraged play on the fund manager’s performance which has proved terrible for its shares, whose price has halved in the past five years in contrast to Finsbury which has traded sideways.

Lindsell Train may not be for the faint-hearted. Shares that were inflated to a 100% premium above NAV six years ago have tumbled to a 24% discount. They could fall further if Train does not turn the situation around. If he does, his funds’ performance will improve and profits at his business will start to rise. That would be a powerful catalyst for the stock.

Lindsell Train Investment Trust profile page 

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