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Trojan Ethical Income Fund

The investment objective of the Trojan Ethical Income Fund is to seek to achieve income with the potential for capital growth in the medium term (3 to 5 years).

Its investment policy is to invest at least 80% of its assets in UK and overseas equities, including investment trusts and real estate investment trusts and equity-related securities. At least 60% of its assets will be invested in UK equities and equity-related securities. A maximum of 30% of its assets may also be invested in overseas equities and equity-related securities.

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. A document setting out the fund’s ethical exclusion criteria is available here.

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 11/08/2020
Accumulation Shares
Income Shares
116.50p
Fund Size
£257m (31/07/20)

Past performance is not a guide to future performance.

July 2020

Your Fund delivered a total return of -1.1% during the month compared to -3.6% the return of the FTSE-All Share Index (TR).

The month of July saw the normal torrent of corporate earnings announcements relating to what has been a far from normal first half of the year.  These results statements are a continued reminder, if one was needed, of the importance of strong business models, healthy margins and conservative financing.  Sabre Insurance was the single biggest contributor to the Fund’s performance in the period after publishing a set of figures that reflected these qualities.

As a niche operator in the otherwise highly competitive motor insurance industry, Sabre is able to focus on underwriting profitably rather than obsess about volume and market share. Healthy margins combined with a decline in claims, as drivers were kept off the roads by lockdown, meant earnings have behaved defensively and the company has not had to furlough staff or draw on government support measures.  It has also allowed the company to support its more vulnerable customers through the pandemic. The company also retains a significant capital buffer above that demanded by the regulator.

The combination of resilient cash generation and a prudent capital structure has allowed Sabre to demonstrate to its regulator that it can both afford to pay investors an ordinary dividend and distribute excess accumulated capital in the form of a 5.2p special dividend.

Not all companies in the wider market, or indeed the Fund, have proven as robust as Sabre through the global pandemic. The challenges in the first half of 2020 have manifested themselves in wide-ranging cancellations, cuts, or deferrals of dividends. In the UK market, Q2 dividends were less than half the level paid out last year.

Whilst your Fund has been more resilient so far, it has not been immune, and will pay out an interim dividend of 1.2p, versus 1.78p a year ago. The reduction also reflects a number of active portfolio decisions taken over the past ~18 months to bolster dividend growth and sustainability at the expense of headline yield. In spite of this, we are confident that recent and ongoing changes improve the durability of underlying free cash flow growth, thereby supporting the Fund’s long-term income-generation potential.

 

Source: Lipper, Link Fund Solutions Limited

Total Return 06/01/2016
Since Launch
31/07/2017
3 Years
31/07/2019
1 Year
31/01/2020
6 Months
Trojan Ethical Income O Acc +29.2% +12.7% -6.7% -9.9%
FTSE All-Share TR +16.3% -9.1% -17.8% -17.8%
Discrete Calendar Annual Returns (%) 2016 2018 2019 2020
Trojan Ethical Income O Acc +8.0% -2.9% +23.9% -9.8%

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

Source: Lipper, Link Fund Solutions Limited. Since Launch (06/01/2016) to 31 July 2020.

Risk Analysis Since Launch (06/01/2016) Trojan Ethical Income O Acc FTSE All-Share TR
Total Return +29.2% +16.3%
Max Drawdown -25.4% -35.3%
Best Month +5.7% +6.4%
Worst Month -9.1% -15.1%
Positive Months +61.1% +61.1%
Annualised Volatility +9.5% +12.7%

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 standard deviation of annual returns. 

Source: Lipper, Link Fund Solutions Limited.  

Top 10 holdings Fund %
Unilever 5.7
RELX 4.5
Reckitt Benckiser 4.3
Nestlé 3.8
Colgate-Palmolive 3.7
Experian 3.4
AstraZeneca 2.7
GlaxoSmithKline 2.7
Procter & Gamble 2.6
Paychex 2.5
Total Top 10 35.7
35 other holdings 56.8
Cash & Equivalent 7.5
TOTAL 100.0

 

Past performance is not necessarily 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.

How to Invest

You may invest directly, via a broker or adviser, or through a number of online fund platforms.

How to Invest