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TROJAN ETHICAL INCOME O

TROJAN ETHICAL INCOME O - Overview

Overview of TROJAN ETHICAL INCOME O Buy in ISA Buy in Investment Account

The investment objective of the fund is to provide income with the potential for capital growth in the medium term, via a portfolio of mainly UK equities (approx. 75% UK, 25% Global). In selecting these equities, manager Hugo Ure follows the Troy house approach of focusing on capital preservation and quality companies. The fund will invest in accordance with the parameters of its ethical investment criteria, which prohibit investments in alcohol, fossil fuels, gambling, pornography, tobacco and armaments. We would describe the fund’s ethical restrictions as light to mid green.

  • Standard Initial Charge 0.00%
  • Initial charge via Bestinvest 0.00%

Fund summary

Sector Unclassified
Structure OEIC
Launched January, 2016
Size £147m
Yield 2.9%
Charging basis Capital
Dividends paid 31 Mar, 30 Sep

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.00%
Ongoing charges figure 1.02%

Risks

Before investing make sure you have understood the risks relevant to the fund by reviewing our Risk Warnings section. Further information on the risks are contained in the fund's Key Information Investor Document, which we make available to you before you make a decision to invest, alternatively it is available on request.

Bestinvest view

Troy is a longstanding and successful boutique that has built its brand on an investment philosophy of capital preservation and compounding returns over the long term. When he launched this fund in 2016, manager Hugo Ure brought this philosophy to the ethical arena, and to date has delivered attractive returns to investors. Though the fund’s history is limited, it has a high degree of commonality with the Trojan Income fund co-managed by Ure. Trojan Income has historically provided a defensive performance profile along with highly attractive capital growth. The Ethical Income fund's focus on income and quality/ larger companies differentiates it from a number of peers in the space, which are more multi-cap and growth focused.

Portfolio

Allocation Proportion(%)
Equity 91
High yield bonds 0
Quality bonds 0
Property 0
Commodities 0
Hedge 0
Fund cash 9
Allocation Proportion(%)
UK 70
Europe 10
North America 20
Japan 0
Pacific 0
Emerging Markets 0
Allocation Proportion(%)
Large Caps 67
Mid Caps 18
Small Caps 15
View all performance data for this fund

Investment process

As with all Troy funds this has a focus on capital preservation and consequently may hold up to 20% cash depending on the overall level of equity valuations. The remainder of the portfolio is constructed on a primarily bottom-up basis, with EIRIS, a provider of environmental, social and governance data, providing a negative screen for the ethical restrictions. Ure favours quality companies with high returns on invested capital sustained by durable competitive advantages - special assets (brands, relationships, networks, intellectual property) that protect them from competitors. He also looks for sound balance sheets so that management can allocate capital flexibly; and management that acts in the best interests of shareholders. He buys these companies when their shares are quoted at a price that underestimates future cash flows. The investment process draws the fund towards certain sectors, particularly consumer goods, healthcare and business software. More cyclical, capital intensive sectors are avoided – the fund seldom invests in miners, aerospace or housebuilders. Troy’s investment universe consists of around 200 companies, of which 100 are in the UK and the remainder in the US and Europe. Of these Ure picks 35-50 for the fund. Stock turnover is low.

Live feed

Bid price(inc) 123.24p
Accum units 137.22p
Fund commentary 24/07/19
Fund data updated on 16/10/19

Asset allocation

Allocation Proportion(%)
Equity 91
High yield bonds 0
Quality bonds 0
Property 0
Commodities 0
Hedge 0
Fund cash 9

Equity Geographic

Allocation Proportion(%)
UK 70
Europe 10
North America 20
Japan 0
Pacific 0
Emerging Markets 0

Equity Capitalisation

Allocation Propor
tion(%)
Large Caps 67
Mid Caps 18
Small Caps 15

Top 10 holdings

As at: 31/08/2019
5.3% Unilever
4.4% Compass Group
3.8% Lloyds
3.7% Procter & Gamble Co
3.5% Colgate-Palmolive Co
3.5% Glaxosmithkline
3.4% National Grid
3.4% Astrazeneca Plc
3.4% Nestle Sa
3.2% Relx Nv
Source: Trustnet

Sector breakdown

Consumer Goods 29%
Health Care 12%
Financials 11%
Industrials 11%
Real Estate 9%
Consumer Services 7%
Banks 7%
Money Market 5%
Technology 3%
Utilities 3%

Portfolio details

35-50 holdings. Mainly UK names. Currency hedging may be used on foreign names.

Constraints

Ethical restrictions on investments. 6% max per stock. 3% max mid cap. 2% max small cap.
The portfolio usually has very little commonality with the benchmark and so performance can be expected to differ markedly on occasions.

Average monthly relative returns Bestinvest MRI
14/15 15/16 16/17 17/18 18/19   3 years 5 years Career 3 years 5 years Career
-0.35% -0.07% 0.93%   0.17% 0.03% 82.40% 70.20%
Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Hugo Ure

Manager. Ure joined Troy Asset Management in January 2009. He graduated from Oxford University in 1999, following which he spent five years in the British Army serving with the Scots Guards. In 2004 he left to join Kleinwort Benson where, after a short period in portfolio management, he focused on equity analysis until his move to Troy in January 2009. He is currently co-manager of the Troy Income & Growth Trust and assistant manager of the Trojan Income Fund. He has also had primary responsibility for a £75m segregated charity portfolio since 2012. Ure is a CFA charterholder.

Track record

Hugo Ure has 3.7 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.03%. During the worst period of relative performance (from February 2016 - May 2018) there was a decline of 14% relative to the index. The worst absolute loss has been 6%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 70%.

Periods of worst performance
Absolute -6% (December 2017 - March 2018)
Relative -14% (February 2016 - May 2018)

Other funds managed

  Start Date
TROJAN ETHICAL INCOME OJan 2016

Sector record since February 2016 (4 yrs)




About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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