Trojan Ethical Income Fund

Troy

A fully invested equity strategy that aims to provide investors with growing levels of income with resilient capital growth by investing at least 80% of its assets in UK and overseas equities and equity-related securities.

What does the fund do?

We manage a concentrated portfolio of 30-50 high-quality, cash-generative companies that are capable of consistent dividend growth. At least 60% of the Fund is invested in UK equities with a maximum if 30% invested in overseas equities.

Our long-term approach and focus on reasonably valued, high-quality, sustainable and cash generative companies leads to low portfolio turnover. The fund will invest in accordance with the parameters of its ethical exclusion criteria, which consider ethical issues in relation to: fossil fuels, pornography, tobacco and certain types of armaments.

View our ethical exclusion criteria

Why this fund?

We believe our approach to income investing is differentiated through; our conservative quality-orientated process, our focus on total return and our prioritisation of dividend growth above high yield.

We seek a sensible balance between capital and income return in order to deliver above average returns with below average volatility.

The strategy has no explicit yield target and instead we emphasise real growth and long-term sustainability of the income stream above producing the highest dividend yield today. In so doing, we aim to deliver investors a growing yield on their initial investment.

In addition to the Ethical Exclusion Criteria the The Fund integrates ESG and stewardship in accordance with Troy’s Responsible Investment & Stewardship Policy and also adheres to Troy’s Climate Change Mitigation Policy, in accordance with article 8 of SFDR.

View our SFDR disclosure

Commentary

July 2024

Your Fund returned of +3.2% during the month, compared to a return of +3.1% for the FTSE All-Share Index (TR).

In last month’s factsheet, we wrote that we were starting a new UK holding. Having now built a position, we are happy to disclose that the company is Informa, a c.£11bn market cap B2B company focused on live events and academic publishing.

Live events account for the majority of sales and profit, with Informa being the world’s largest operator of B2B trade shows and conferences. The company own key brands and ‘must attend’ shows within various industries globally. For instance, they operate CPHI Worldwide, the largest pharmaceutical exhibition in the world, and Black Hat, a leading cybersecurity conference that takes place in Las Vegas. Each year, Informa put on over 200 of these large-scale trade shows and each of them play a valuable role within their respective markets by facilitating trade and relationship building between thousands of industry professionals. This division of Informa has many aspects we value highly at Troy; revenues are highly diversified by sector and geography whilst leading shows within specific industries are almost impossible to displace. Thanks to high margins and significant upfront payments from exhibitors, who book and pay well in advance of a show taking place, the business is extremely cash generative with high returns on capital. Furthermore, whilst Informa is the market leader globally, ahead of fellow portfolio holding RELX, the industry is highly fragmented, providing ample runway for long-term growth.

Informa’s second focus is academic publishing, with the company operating globally under the well-known Taylor and Francis (T&F) brand. Academic publishing is a highly resilient industry that grows steadily across the cycle. As the world’s fourth largest academic journal and book publisher, T&F sit between academic authors and institutions, facilitating research, publication and distribution of content globally. The division has similarly high operating profit margins as the events business at over 30%, also enjoying strong cash generation. We like the role that the division plays within the wider group, offering significant ballast given the largely non-cyclical nature of revenues.

Led by a long-standing and capable management team, we find Informa a great example of the type of attractive opportunity currently available to UK equity investors. It is a market-leading, global business with strong incremental economics and good growth prospects. The shares trade at a highly reasonable rating of approximately 16x earnings and a 6% free cash flow yield. The dividend, which is more than twice covered by cash flow, is also attractive. It was increased by +10% at the recent half-year results and represents a yield of c.2.4%.

Key facts

Fund Manager

Huge Ure

Inception date

06/01/2016

Currency

Sterling

Available share classes

O, I, S, X

ISIN (O Class)

GB00BYMLFK38 (Acc)
GB00BYMLFL45 (Inc)

Bloomberg (O Class)

TEIFOAC_LN (Acc)
TEIFOIN_LN (Inc)

Sedol (O Class)

BYMLFK3 (Acc)
BYMLFL4 (Inc)

Benchmarks

For more information on the benchmarks used please refer to the ‘use of benchmarks’ section in the fund information sheet

Ongoing Charges

‘O’ (ordinary) shares: 1.02%
‘X’ (platform) shares: 0.87%

‘O’ ACC SHARE CLASS as at 16/08/2024

152.78p

Fund size as at 31/07/2024

£200m

‘O’ INC SHARE CLASS as at 16/08/2024

121.29p

Performance

Source: Lipper, Waystone Management Limited.

06/01/201630/11/201930/11/202130/11/202331/05/2024
Since Launch5 Years3 Years1 Year6 Months
FTSE All-Share TR87.132.225.515.71.9
Trojan Ethical Income O Acc57.511.49.313.16.5

Discrete Calendar Annual Returns (%)201620172018201920202021202220232024
Trojan Ethical Income O Acc810.2-2.923.9-612.1-11.28.28.6

Performance is calculated on a total return basis, net of fees, in sterling terms. Past performance is not a guide to future performance

Source: Lipper, Waystone Management Limited.

Since Launch (06/01/2016) to .

Risk and Volatility since launch

Source: Lipper, Waystone Management Limited.

Risk Analysis Since Launch (06/01/2016)Trojan Ethical Income O AccFTSE All-Share TR
Total Return57.587.1
Max Drawdown-25.4-35.3
Best Month6.612.7
Worst Month-9.1-15.1
Positive Months62.362.3
Annualised Volatility9.912.2

Performance is calculated on a total return basis, net of fees, in sterling terms.

Maximum Drawdown measures the worst investment period

Annualised Volatility is measured by the annualised standard deviation of the monthly returns

Source: Lipper, Waystone Management Limited. As at .

Asset allocation

Top 10 holdingsFund %
Unilever6.57755957473797
RELX6.16193968358809
Reckitt Benckiser4.71395114564286
Bunzl4.44908468633748
LSEG4.4278234127088
Experian4.05786623025075
Compass3.50358947976846
National Grid3.25833839897352
Paychex3.21534867285386
Novartis2.92525483975586
Total Top 1043.2907561246177
27 Other Equity holdings55.4773655760143
Cash1.23187829936807
Total100

Asset allocation and holdings subject to change. As at .

Fund literature

Document name Date Open/download Archived documents
Factsheet     View archive Hide archive
UCITS KIID     View share classes Hide share classes

Fund Information Sheet

View document Download document  
Prospectus & Additional Investor Information     View documents Hide documents

Sustainability-related Disclosures

View document Download document  

Troy’s Ethical Exclusion Criteria

View document Download document  
Newsletters     View newsletters Hide newsletters

Annual Report

January 2024 View document Download document  

Interim Report

July 2023 View document Download document  

Important Information

Past performance is not a guide to future performance. The value of a fund and any income from it may go down as well as up and investors may get back less than they invested. Changes in rates of exchange may cause the value of investments to go up or down. Returns may increase or decrease as a result of currency fluctuations. This data is provided for information only and should not be reproduced, published or disseminated in any manner. Although Troy considers the data to be reliable, no warranty is given as to its accuracy or completeness. Any comparisons against indices are for illustrative purposes only. In line with the Fund’s prospectus, the Fund is authorised to invest in transferable securities and money market instruments issued or guaranteed by an EEA state, one or more local authorities, a third country, or a public international body to which one or more EEA states belong.  The Investment Manager would only consider investing more than 35% of the Fund’s assets in UK or US government issued transferable securities or approved money market instruments. 

Some of the information contained on this page: (1) is proprietary to Morningstar and/or its content providers​; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. 

Important information for U.S. persons

The securities described on this website are neither available nor offered in the United States of America (including the District of Columbia or any other territory occupied or possessed by the United States of America) or to U.S. persons (including residents of the United States of America, residents within an area subject to its jurisdiction and U.S. persons who are resident outside the United States of America).

For the full fund disclaimer please refer to the Fund factsheet.

Please refer to Troy’s Glossary of Terms available here.

How to invest

Find more information on how to invest in this fund and where it is available.

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Trojan Investment Funds and its sub-funds are UK funds established under the provisions of the European Directives on the co-ordination of laws, regulations, and administrative provisions relating to undertakings for collective investment in transferable securities (“UCITS”) (Directive 2009/65/EC) as implemented in the UK.  Trojan Investment Funds is authorised by the FCA.  Certain sub-funds are available for distribution in Ireland (for professional investors only), Singapore (for institutional investors only), Switzerland (for qualified investors only) and are registered for distribution to the public in the UK.

Trojan Fund (Ireland), Trojan Income Fund (Ireland), Trojan Global Income Fund (Ireland) and Trojan Ethical Fund (Ireland) are sub-funds of Trojan Funds (Ireland) plc which is an Irish UCITS subject to the laws of the Republic of Ireland.  Each is authorised in the Republic of Ireland by the Central Bank of Ireland, and is a scheme recognised by the FCA under the Financial Services and Markets 2000 Act (“FSMA”).  Trojan Fund (Ireland) and Trojan Income Fund (Ireland) are registered for distribution in Austria (certain share classes only), Germany (certain share classes only), Ireland, Italy (for institutional investors only), Singapore (for institutional investors only), Spain (certain share classes only), Switzerland and the UK.  Trojan Fund (Ireland) is also registered in Portugal (certain share classes only). Trojan Ethical Fund (Ireland) is registered for distribution in Ireland, Singapore (for institutional investors only), Spain (certain share classes only), Switzerland and the UK.  Trojan Global Income Fund (Ireland) is registered for distribution in Ireland, Spain (certain share classes only), Switzerland and the UK.

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Troy Asset Management Limited, 33 Davies Street, London W1K 4BP, United Kingdom; Telephone +44 (0)20 7499 4030; Email [email protected].  Troy Asset Management Limited is a limited company registered in England and Wales under company number 3930846 and has its registered office at 33 Davies Street, London W1K 4BP , United Kingdom. Except where otherwise required by applicable law or regulations, all communication and documentation sent to you by Troy will be in English.  You may communicate with us in English.

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