fund
This is one of our rated funds. They’re the ones our experts believe will do well for investors over the longer term. Top of the class!
Trojan Ethical Income X
Light to mid green, UK ethical equity income strategy, with a bias towards large-cap quality companies.
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102.68p
Price (Inc)
These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.
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104.93p
Price (Acc)
These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?
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0.00%
Initial chargeSome funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!
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0.85%
Annual management charge
This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).
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0.87%
Ongoing charges
This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.
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2.10%
Yield
How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…
The investment objective of the fund is to provide income with the potential for capital growth in the medium term, via a portfolio of mainly UK equities (approx. 75% UK, 25% Global). In selecting these equities, manager Hugo Ure follows the Troy house approach of focusing on capital preservation and quality companies. The fund will invest in accordance with the parameters of its ethical investment criteria, which prohibit investments in alcohol, fossil fuels, gambling, pornography, tobacco and armaments. We would describe the fund’s ethical restrictions as light to mid green.
Fund summary
| Sector | Unclassified |
| Structure | OEIC |
| Launched | February, 2020 |
| Size | £274m |
| Yield | 2.10% |
| Charging basis | |
| Dividends paid | 31 Mar, 30 Sep |
Charges
| Standard initial charge | 0.00% |
| Initial charge via Bestinvest | 0.00% |
| Additional bid/offer spread | 0.00% |
| Annual management charge | 0.85% |
| Ongoing charges figure | 0.87% |
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Investment process
As with all Troy funds this has a focus on capital preservation and consequently may hold up to 20% cash depending on the overall level of equity valuations. The remainder of the portfolio is constructed on a primarily bottom-up basis, with EIRIS, a provider of environmental, social and governance data, providing a negative screen for the ethical restrictions. Ure favours quality companies with high returns on invested capital sustained by durable competitive advantages - special assets (brands, relationships, networks, intellectual property) that protect them from competitors. He also looks for sound balance sheets so that management can allocate capital flexibly; and management that acts in the best interests of shareholders. He buys these companies when their shares are quoted at a price that underestimates future cash flows. The investment process draws the fund towards certain sectors, particularly consumer goods, healthcare and business software. More cyclical, capital intensive sectors are avoided – the fund seldom invests in miners, aerospace or housebuilders. Troy’s investment universe consists of around 200 companies, of which 100 are in the UK and the remainder in the US and Europe. Of these Ure picks 35-50 for the fund. Stock turnover is low.
Troy is a longstanding and successful boutique that has built its brand on an investment philosophy of capital preservation and compounding returns over the long term. When he launched this fund in 2016, manager Hugo Ure brought this philosophy to the ethical arena, and to date has delivered attractive returns to investors. Though the fund’s history is limited, it has a high degree of commonality with the Trojan Income fund co-managed by Ure. Trojan Income has historically provided a defensive performance profile along with highly attractive capital growth. The Ethical Income fund's focus on income and quality/larger companies differentiates it from a number of peers in the space, which are more multi-cap and growth focused.
Manager research
Average monthly relative returns
- 16/17 -0.71%
- 17/18 -0.13%
- 18/19 0.56%
- 19/20 1.41%
- 20/21 -1.18%
Bestinvest MRI
- 3 years 0.27%
- 5 years -0.01%
- Career -0.02%
- 3 years 78.50%
- 5 years 61.40%
- Career 59.90%
Performance figures are based on the average of monthly percentage returns relative to the benchmark index.
Hugo Ure
Ure joined Troy Asset Management in January 2009. He graduated from Oxford University in 1999, following which he spent five years in the British Army serving with the Scots Guards. In 2004 he left to join Kleinwort Benson where, after a short period in portfolio management, he focused on equity analysis until his move to Troy in January 2009. He is currently co-manager of the Troy Income & Growth Trust and assistant manager of the Trojan Income Fund. He has also had primary responsibility for a £75m segregated charity portfolio since 2012. Ure is a CFA charterholder.
Track record
Hugo Ure has 5.2 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.02%. During the worst period of relative performance (from February 2016 - May 2018) there was a decline of 14% relative to the index. The worst absolute loss has been 16%.
Periods of worst performance
| Absolute | -16.00% (January 2020 - March 2020) |
| Relative | -14.00% (February 2016 - May 2018) |
About the MRI
Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.
Allocation
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Top 10 holdings
Data accurate as at 31 July 2020
| 5.7% | Unilever |
| 4.5% | Relx Nv |
| 4.3% | Reckitt Benckiser Group Plc |
| 3.8% | Nestle Sa |
| 3.7% | Colgate-Palmolive Co |
| 3.4% | Experian Plc |
| 2.7% | Astrazeneca Plc |
| 2.7% | Glaxosmithkline |
| 2.6% | Procter & Gamble Co |
| 2.5% | Paychex Inc |
| Source: Trustnet |
Sector breakdown
| Consumer Staples | 25.00% |
| Financials | 16.00% |
| Industrials | 13.00% |
| Health Care | 12.00% |
| Consumer Discretionary | 11.00% |
| Money Market | 8.00% |
| Real Estate | 6.00% |
| Information Technology | 5.00% |
| Utilities | 2.00% |
| Materials | 2.00% |
Portfolio
35-50 holdings. Mainly UK names. Currency hedging may be used on foreign names.
Constraints
Ethical restrictions on investments. 6% max per stock. 3% max mid cap. 2% max small cap.