Troy Income & Growth Trust
UK Equity Income
Rated fund 2013-20. A good option for relatively cautious investors
Troy Income & Growth is a particularly good option for relatively cautious investors, because it takes capital protection as its main objective. Cantor Fitzgerald analyst Markuz Jaffe points to another successful year for the trust, building on its outperformance during the fourth quarter of 2018 when investors were partially shielded from the stockmarket slump, and again during the market sell-off in August 2019.
Francis Brooke has run the trust since 2009, being joined by co-manager Hugo Ure in 2015. The pair runs a relatively concentrated portfolio of around 50 quality companies that are able to grow their dividends almost irrespective of the wider market. The trust yields 3.2% and pays dividends quarterly. The managers invest predominantly in UK companies, but can also hold overseas shares, buying companies that can generate growing amounts of cash well into the future. They invest in businesses with high returns on capital, sustained by durable competitive advantages. They buy them when three further conditions are met: a strong balance sheet, a management team that will act in the best interests of shareholders, and a share price that underestimates future cash flows.
The trust has operated a discount control policy since 2010, so its shares tend to trade close to the value of its assets. It was at a small premium at the end of 2019. "At a time when concerns over global growth are frequently surfacing, it is no surprise to see a defensive strategy with a proven track record trading favourably, this being one of the few UK equity income investment trusts to trade on a premium," adds Jaffe.
Narrative and ratings content all as of January 2020.See all Money Observer rated funds
|Unilever PLC||5.27 %|
|Experian PLC||4.21 %|
|Lloyds Banking Group PLC||4.18 %|
|GlaxoSmithKline PLC||4.01 %|
|RELX PLC||3.97 %|
|National Grid PLC||3.74 %|
|Reckitt Benckiser Group PLC||3.73 %|
|Compass Group PLC||3.67 %|
|Nestle SA||3.45 %|
|AstraZeneca PLC||3.35 %|
|United Kingdom||79.89 %|
|United States||16.51 %|
|Consumer Defensive||27.26 %|
|Financial Services||21.21 %|
|Consumer Cyclical||10.82 %|
|Communication Services||5.27 %|
|Real Estate||5.23 %|
Hugo joined Troy in 2009 from Kleinwort Benson, where he was an equity analyst. Hugo gained his MA in Geology from Oxford University in 1999, following which he spent five years serving with the Scots Guards. He holds the CISI Diploma and is a CFA Charterholder.
Francis graduated from Edinburgh University in 1986, following which he worked at Kleinwort Benson Securities and Foreign & Colonial Management Ltd, where he was appointed Director in 1995. From 1997 to 2004 he worked for Merrill Lynch Investment Managers as a Director. He was also a member of both the Asset Allocation & Sector Strategy Committees at MLIM. In 2004 he left to join Troy.
Data provided by Morningstar.
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