Trojan Income Fund (Ireland)

Markets recovered in April as investors began to look through the immediate shock of the Middle East conflict. The standout share price performers in your Fund were industrial distributor Diploma and niche engineering group Halma, rising +16.3% and +15.9% respectively.

Diploma has been held since January 2021, Halma since February 2024, and we have written about both in a prior newsletter. Both combine strong organic businesses with disciplined, self-funded acquisition strategies that have compounded value for shareholders over many years. The performance in April reflects some specific operational momentum: Diploma’s Peerless business is seeing strong demand in aerospace, while Halma is proving to be a rare UK market beneficiary of AI-related demand through its Avo Photonics division. The long-standing success of both businesses is considerably broader than these individual units, but both are currently enjoying particularly strong demand. We are alive to the sustainability of such periods, and this is reflected in how we have managed position sizes at different points throughout our ownership. Most recently, we have trimmed Diploma following a significant re-rating of the shares.

Elsewhere, it was pleasing to see RELX and LSEG recover some ground, having been caught up in the indiscriminate de-rating of data and information services stocks earlier in the year. We continue to hold both with conviction. Following near 40% rallies from their lows, however, we have reduced our positions to reflect improved valuations.

Finally, we have recently added to Howden Joinery on weakness. The company delivered a solid trading update, demonstrating the resilience of the business and continued market share gains. A considerable degree of pessimism around the UK economic outlook appears reflected in the share price, and the shares were back to a 3% dividend yield. We feel the balance of risk and reward has become favourable once more.