Trojan Ethical Global Income Fund

The investment objective of the Trojan Ethical Global Income Fund is to seek to achieve income with the potential for capital growth in the medium term (3 to 5 years). The Fund’s investment policy is to invest at least 80% of its assets globally in equities and equity-related securities. It may also invest in in government and public securities (such as sovereign debt and treasury bills), corporate bonds, real estate (via REITs), cash, cash equivalents (including money-market instruments) and deposits.

In addition to the O share class referred to on this page, S Classes are also available. Please contact us for more information.

'O' Share Class Price 10/08/2022
Accumulation Shares
Income Shares
Fund Size
£32m (30/06/22)

Past performance is not a guide to future performance.

June 2022

We have established an investment in Admiral Group funded by the sale of GSK. Although a longstanding holding, GSK has never been the most exciting company in our opinion. Recent performance has been strong for a variety of reasons. These include the upcoming hiving off of the consumer business following the failed bid by Unilever, a change in dividend policy and the recent strength of the US dollar (GSK has substantial US dollar earnings). Having been attractively valued for a considerable period this rise in the share price offered an attractive time to sell.

Conversely Admiral has performed poorly recently. During COVID Admiral’s customers were paying premiums without being able to use their cars giving a short term bump to profits. This was reflected in a strong share price. As this effect faded so too did the company’s valuation.

A reallocation of capital from GSK to Admiral was therefore timely.

Admiral Group is an excellent business. Dominated by the UK car insurance business, Admiral’s market leadership is based on its expertise in underwriting a specific cohort of the population, that being young men in fast cars. This specialisation leads to an extensive data set affording accurate pricing of risk. As such, and unusually for an insurance business, the company makes an underwriting profit over the cycle. This historically persistent and consistent profitability allows Admiral to offload the


insurance risk to Munich Re but to retain much of the profitability. Costs are contained, giving the company a very attractive return profile. All of this together means the company has limited capital requirements and is therefore able to pay a healthy dividend.

Following the post-COVID decline we were able to invest in the company at an attractive valuation of 12.8x price to earnings ratio.

Strength in the US bond market has been a feature of the latter part of the month. Having been very weak as markets priced in a more inflationary backdrop, it is notable that the US 10 year Treasury bond has retraced from a 3.47% high to 2.88% at the beginning of July. Oil and other commodities have also been weak. Credit spreads continue to widen. This is all indicative of a weaker economic tone and suggests we may have already seen the cyclical peak in inflation.


Top 10 holdings Fund %
Paychex 5.6
PepsiCo 5.1
ADP 4.9
Reckitt Benckiser 4.8
Unilever 4.8
CME Group 4.8
Johnson & Johnson 4.2
Microsoft 3.8
Novartis 3.8
Roche Holding 3.6
Total Top 10 45.3
23 other holdings 53.0
Cash 1.7
Total 100.0

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).

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