Troy Trojan Global Income Class O - Accumulation

Our conviction in Harries stems from his long track record established during his time at Newton, where he delivered strong returns versus both the benchmark and peers in his 10 years managing a global equity income fund. Since launching this fund in November 2016, it has underperformed the IA Global Equity Income sector.

During this period there’s been a wide dispersion between different areas of the market. Consumer staples companies, where Harries tends to invest heavily, have fallen behind other sectors such as technology. Global equity income funds don’t tend to invest as much in areas like technology or the US because of the lack of dividends they pay.

The fund has been less volatile than both the broader market and most funds in the IA Global Equity Income sector though, and it’s provided much-needed shelter when stock markets have fallen. We expect this to continue over the long term, though there are no guarantees.

Sheltering investors’ wealth has always been the most important thing at Troy. The fund managers believe that’s the best starting point for growing wealth over the long term. All Troy funds are managed in the same disciplined way – patiently investing in a small number of high-quality holdings. All fund managers at Troy contribute to the thorough research of around 200 companies deemed suitable for the group’s funds, creating a collegiate environment.

Harries’ approach has all the hallmarks of a Troy fund – a focus on financially sound companies that have shown their resilience in both good and bad economic conditions. He has scope to invest anywhere in the world but tends to favour developed markets, such as the US, UK, and Europe. Although he can invest in higher-risk emerging markets, he tends to avoid them and instead prefers companies that sometimes sell their products in these regions.

When making any investment, taking a long-term view is at the forefront of the team’s analysis. They don’t tend to react to short-term blips in the stock market or wider economy. This means changes to the fund are kept to a minimum. Only a few new ideas are considered each year and investments are only sold if the managers feel the company’s outlook has changed, it becomes too highly valued, or they find a better idea elsewhere.

The fund consists of between 30-50 companies, although tends to be near the bottom of that range. This concentrated approach means each company can have a significant impact on performance and so it’s a higher-risk strategy. Every company in the fund must pay a dividend, but the fund doesn't have an income target. Harries is more focused on total return, a combination of income and growth, than income alone and won’t chase an unsustainable yield that is potentially damaging to a company’s long-term prospects.

Investors should be aware that charges are taken from capital, which can increase the yield but reduces the potential for capital growth. The manager also has the flexibility to use derivatives which increase risk.