Trojan Income Fund
The investment objective of Trojan Income Fund is to provide an above average income with the potential for capital growth in the medium term. The investment policy is to invest substantially in UK and overseas equities and fixed interest securities but Trojan Income Fund may also invest in collective investment schemes and money market instruments.
In addition to the O share class referred to on this page, I & S Classes are also available. Please contact us for more information.
|'O' Share Class||Price 08/12/2016|
The Fund returned +0.1% during the month compared to +0.6% for the FTSE All-Share (TR) Index.
The main headwind for the portfolio has been the impact of rising inflationary expectations, partly prompted by the fall in sterling as a result of the referendum. Gilt yields rose sharply during the month and this in turn has put pressure on some of the defensive areas of the market such as utilities and consumer goods which continue to be important income generators for the Fund.
Stocks like Severn Trent, Pennon and Unilever all fell by over 6% whereas financials like Lloyds (+5%), ICAP (+4%) and Schroders (+5%) all responded positively to the steepening yield curve which presents a more favourable trading environment. This is a difficult environment for defensively positioned portfolios but as valuations contract we are likely to see opportunities to add new holdings or to increase existing ones. In absolute terms we always seek to minimise volatility but there will be occasions when the performance of the portfolio differs markedly from the comparator index. Relative volatility like this can make the Fund look a little pedestrian.
In mid-October WH Smith plc, a long standing holding in the Fund, announced another set of excellent annual results. Earnings for the year to 31st August were up by 10% and the dividend for the full year was up by 11%. Over the past five years the share price total return of 215% has outstripped that of the FTSE All Share Index by more than 3.5x while the dividend has grown by nearly 15% per annum. In 2017 the company will celebrate its 225th anniversary and despite being seen by many investors just a few years ago as an outdated retail format doomed to decline, top quality management and capital discipline has delivered excellent returns for shareholders. A relentless focus on costs and judicious investment in the Travel division has more than offset the moribund UK High Street stores. WH Smith now operates 232 stores in twenty two countries, predominantly in airports and railway stations. There is plenty of opportunity to grow the international travel business.
As well as the annual dividend, over £365m has been returned to shareholders via share buybacks over the last ten years. A further £50m buyback was announced in the latest results. This is a good example of a retailer which can negotiate the vagaries of consumer confidence and thrive due to a clear strategy which is consistently executed.
Source: Lipper, Capita Asset Services
The source for performance data has been changed. This change may have resulted in variations from previously published performance figures. These variations are deemed to be immaterial both individually and cumulatively.
|Total Return to 31 October 2016||30/09/04|
|Trojan Income Fund||+205.4%||+135.5%||+75.3%||+34.8%||+10.3%||+7.9%|
|LIBID* GBP 1 month||+28.4%||+16.6%||+2.0%||+1.1%||+0.3%||+0.1%|
|IA UK Equity Income||+156.5%||+73.9%||+65.6%||+18.8%||+6.9%||+7.5%|
|FTSE All-Share (TR) Index||+152.8%||+71.3%||+57.4%||+16.8%||+12.2%||+12.2%|
*London Inter Bank Bid Rate
Annual Returns (%)
|Trojan Income Fund||+11.7%||+16.8%||+5.0%||-12.1%||+14.7%||+14.4%||+6.3%||+9.9%||+20.2%||+10.0%||+10.7%||+9.2%|
Source: Lipper, Capita Asset Services
The source of performance data has been changed. This change may have resulted in variations from previously published performance figures.
|Risk Analysis Since Launch||Fund||IA UK Equity Income||FTSE All-Share (TR)|
* Measures the worst investment period
|Top 10 Holdings||Fund (%)|
|Royal Dutch Shell||4.1|
|Total Top 10||35.5|
|35 other holdings||57.9|
|Cash & equivalent||6.6|
How to Invest
You may invest directly, via a broker or adviser, or through a number of online fund platforms.
- Fund Manager
- Assistant Fund Manager
- Inception Date
- Available Share Class
O, I, S
- ISIN (O Class)
- Bloomberg (O Class)
- Sedol (O Class)