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Market capitalisation fell from £2bn to £1.7bn, as total returns based on net asset value per share dropped from 10.6% to a loss of 5.8%.

Share price total return fell 5.6%, greater than the FTSE All Share’s 4% fall.

“It is disappointing to me to have to report on a second consecutive year of my underperformance of your company’s benchmark,” Train wrote. “It has been particularly frustrating, given that the business performance of most of the companies in the portfolio has met or exceeded my expectations.”

The star fund manager has backed a number of wealth management business such as Hargreaves Lansdown and Schroders in recent years.

A combination of unlocked pension funds, increased housing wealth, intergenerational transfers, and an ageing population in need of financial help have all been seen as major tailwinds for the sector.

However, Train said those holdings had suffered a “miserable year” in share price terms — even as client and asset numbers grew for the sector.

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“Sometimes this happens,” he wrote. “Other investors’ attention is turned to different areas of the stock market, or they disagree with my enthusiasm about the prospects for certain companies — leaving our investments for you becalmed, or worse.”

“For the benefit of my ego and, I hope, to cheer up readers of this report, can I nonetheless note that my investment performance improved in the second half of your company’s financial year and outperformed – admittedly only by dint of falling less than the weak UK stock market,” he added.

Train said not holding young technology companies helped him towards the later stages of the year. The NASDAQ has plummeted nearly 30% year-to-date as investors question the valuations of leading names in the sector.

While Train holds technology-reliant firms such as credit reporting firm Experian, the London Stock Exchange and software company Sage, he said valuations were much more favourable.

Investors have turned to “shares of durable, conservatively-financed and steadily compounding companies” and away from cyclical businesses amid “alarming macro-economic disturbance,” he said. He pointed to the likes of alcoholic drinks manufacturers Diageo and Heineken as well as food manufacturer Mondelez as bastions of stability.

Burberry and Unilever also saw share price gains in the second half amid leadership changes, Train said, adding he would continue to hold the likes of Hargreaves Lansdown and Schroders because of how they perform not just in a difficult economic climate, but also over whole cycles.

“While it is easy to categorise our investment approach for the company as purely ‘defensive’, we do not see it as such,” he wrote.

Train said he deliberately had not discussed macro-economic turmoil in his annual review.

“My reluctance to opine, is primarily because I know that we, and I don’t believe anyone else, can really know what is in store,” he said.

However, he added that “all investors, indeed most people on the planet, must earnestly hope this wretched war in Ukraine ends soon”.

Train added: “I ask you to conceive the boost to consumer confidence and government finances that would result from peace breaking out and the likely reaction of stock markets around the world.”

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To contact the author of this story with feedback or news, email Justin Cash