Trojan Ethical Income Fund

Troy

Overview

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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 of 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, alcohol, 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

The team

Commentary

May 2025

Your Fund returned +3.9% during the month, compared to +4.1% for the FTSE All-Share Index (TR).

The FTSE All-Share has now rallied almost +15% since the low point of April’s US tariff induced sell-off, reminding us again that volatility presents opportunities for long-term investors.

The Fund’s strongest contributor in the month was industrial distributor Diploma, whose shares rose +18.7%, buoyed by the release of strong half year results. Diploma’s revenues grew +14% in the six-month reporting period, whilst earnings per share rose +23%. Importantly, growth was delivered whilst maintaining a high return on capital of almost 20%.

Diploma’s long runway for organic and inorganic growth at high incremental returns on capital is what attracts us. The company is exposed to growing end markets ranging from aerospace to datacentres. They also have a strong track record of acquiring small private, often family-owned businesses at attractive valuations. Management skill is crucial here, and we hold CEO Johnny Thomson in high regard, having followed his career at both Diploma and before that at Compass Group where we have been long-standing investors.

The other top performers in the month were two of the Fund’s leading UK domestic businesses, AJ Bell and Howden Joinery Group. AJ Bell surpassed consensus expectations on organic growth (growing 17% over their most recent reporting period) while Howden demonstrated resilient trading in a subdued kitchen market. It has been reassuring to see robust underlying growth reported by a number of our companies, especially in the context of current economic and geopolitical uncertainty.

 

Key facts

Fund Manager

Blake Hutchins

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 30/10/2024

154.17p

Fund size as at 31/05/2025

£141m

‘O’ INC SHARE CLASS as at 30/10/2024

122.40p

Performance

Source: Lipper.

06/01/201631/05/202031/05/202231/05/202430/11/2024
Since Launch5 Years3 Years1 Year6 Months
FTSE All-Share TR100.769.026.89.47.3
Trojan Ethical Income O Acc60.823.116.18.82.1

Discrete Calendar Annual Returns (%)2016201720182019202020212022202320242025
Trojan Ethical Income O Acc810.2-2.923.9-612.1-11.28.25.65

Source: Lipper. Since Launch (06/01/2016) to 31 May 2025. Past performance is not a guide to future performance. Performance is calculated on a total return basis, net of fees, in sterling terms.

Risk and Volatility since launch

Source: Lipper.

Risk Analysis Since Launch (06/01/2016)Trojan Ethical Income O AccFTSE All-Share TR
Total Return60.8100.7
Max Drawdown-25.4-35.3
Best Month6.612.7
Worst Month-9.1-15.1
Positive Months61.661.6
Annualised Volatility10.012.1

Maximum Drawdown measures the worst investment period. Annualised Volatility is measured by the annualised standard deviation of the monthly returns. Source: Lipper, as at 31 May 2025. Past performance is not a guide to future performance. Performance is calculated on a total return basis, net of fees, in sterling terms.

Asset allocation

Top 10 holdingsFund %
Unilever5.74423833485169
RELX5.63733684546652
LSEG3.98523220492054
Reckitt Benckiser3.93967977703257
Compass3.83571886952339
Experian3.82670697321221
Amadeus3.40472552689078
Bunzl3.33237627580526
CME3.02745558065017
GSK3.02699991795042
Total Top 1039.7604703063036
25 Other Equity holdings59.0474375130905
Cash1.19209218060596
Total100

Asset allocation and holdings subject to change. As at 31 May 2025.

Fund literature

Document name Date Open/download Archived documents
Factsheet     View archive Hide archive
Newsletters     View newsletters Hide newsletters

Fund Information Sheet

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Interim Report

 July 2024 View document Download document  

Annual Report

 January 2025 View document Download document  
UCITS KIID     View share classes Hide share classes
Sustainability-related Disclosures     View documents Hide documents

Troy’s Ethical Exclusion Criteria

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Prospectus & Additional Investor Information     View documents Hide documents

Sustainable Investment Labels Statement

Sustainable investment labels help investors find products that have a specific sustainability goal. This fund does not have a UK sustainable investment label as it does not have a sustainable objective as part of its investment objective.  Despite not having a sustainable investment objective, when investing in companies, Troy integrates the analysis of sustainability characteristics into its investment decision-making. Troy also considers the steps companies are taking in relation to climate change mitigation.

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. 

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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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