Bestinvest says
Since launch this fund has consistently met its target of positive returns each year whilst protecting investors’ capital in volatile markets. Performance is also significantly less volatile than global equity markets, though the long only approach means falls in value are still possible and the fund will be more volatile than a “pure” absolute return product. It benefits from the manager's detailed knowledge of economic history, which enables him to ignore short term market trends and bubbles in favour of longer term growth opportunities, something that enabled the fund to weather the 2008 financial crisis well.
The investment process is two fold: global macro economic views drive asset allocation from the top down; whilst from the bottom up, stock selection is very specific with the manager targeting sustainable business franchises where he takes a balance between good quality defensive stocks and growth stocks.
•Top Down process: this primarily relies on the managers' experience and views on how current markets compare with history. They make big switches between the main asset classes (currency, fixed interest, gold and equities) depending on relative values and outlook.
•Bottom Up process: Trojan typically target higher yielding stocks. They analyse company balance sheets and past records looking for a history of adding value. They shy away from companies with weak or under threat dividends and generally avoid cyclical companies. They follow only around 100 companies and tend to favour: Consumer Staples, Utilities, Tobaccos and companies with repeat revenues. They rely on others for companies' valuation models and do not put too much emphasis on company meetings. The process is "contrarian", as they like it when people find their companies dull - this often suggests to them that the market is missing the opportunity. The portfolio has a low turnover at around 20% and they need a good reason to sell their favoured stocks.