Trojan Ethical Income Fund
The investment objective of Trojan Ethical Income Fund is to seek to provide income with the potential for capital growth in the medium term. Its investment policy is to invest substantially in UK and overseas equities. Trojan Ethical Income Fund may also invest in fixed interest securities, indices, deposits, collective investment schemes and money market instruments.
The fund will invest in accordance with the parameters of its ethical investment criteria, which consider ethical issues in relation to: fossil fuels, pornography, tobacco and certain types of armaments. A document setting out the fund’s ethical investment criteria is available here.
In addition to the O share class referred to on this page, I & S Classes are also available. Please contact us for more information.
Derivatives may be employed for the purposes of efficient portfolio management.
Investment Performance will not be shown until one calendar year after the fund's launch due to regulatory requirements. Similarly, no information relating to Trojan Ethical Income Fund is included in either the Interim Report or Annual Report.
|'O' Share Class||Price 25/10/2016|
During September the Fund struggled to keep pace with a continued strong performance from the UK equity market.
The sluggishness was caused more by an absence in the portfolio of most of the stocks which led the market rather than holding too many losers. Many more stocks lagged the market than outperformed and the leaders were concentrated in the mining sector, a few related industrials such as Weir Group and financials like Metro Bank and Esure.
In essence the month saw some of the post-referendum gains unwind as the big international earners in the portfolio lost the momentum provided by the devaluation of sterling in late June. The pound remains vulnerable to the inevitable uncertainty that will prevail as the Brexit negotiations evolve and we do not share the view that this weakness is an unalloyed benefit to the UK. Only for a brief period in 1984/5 has sterling ever been weaker versus the US$ than it is today. This is creating inflationary pressures, which may not become apparent until next year, and will undoubtedly squeeze profit margins for those companies most exposed to imports.
On a more positive note the Fund’s income account has been boosted by the 42% of the portfolio’s income that is determined in overseas currencies (predominantly US$). As per the broader market, this will benefit UK investors with sterling liabilities in the medium term at least. The other potential by-product of the weakness of sterling could well be increased M&A activity as cash rich overseas companies with access to cheap credit see attractive opportunities in the UK. Despite low underlying growth rates it is possible that valuations are driven yet higher as a result, increasing investors’ vulnerability to a market setback.
Portfolio activity was limited to modestly reducing some of those holdings that have performed best over recent weeks and adding to those that have experienced weakness. One such stock was Next plc. Currency-related weakness gave us the opportunity to add to this holding at a yield above 3.3%. We continue to seek attractive valuation opportunities which will also support income growth.
|Top 10 Holdings||Fund (%)|
|Total Top 10||29.9|
|34 other holdings||58.5|
|Cash & equivalent||11.6|
How to Invest
You may invest directly, via a broker or adviser, or through a number of online fund platforms.
- Fund Manager
- Inception Date
- Available Share Class
O, I, S
- ISIN (O Class)
- Bloomberg (O Class)
- Sedol (O Class)