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Troy Trojan: May 2022 fund update

Investments can go down as well as up so there is always a danger that you could get back less than you invest. Nothing here is personalised advice, if unsure you should seek advice.
  • Lead manager Sebastian Lyon is part-owner of Troy Asset Management so we think he's incentivised to perform
  • We like the simple philosophy behind this fund, with the potential for long-term growth and a focus on limiting losses in weaker markets
  • The fund has outpaced inflation since it launched in May 2001
  • This fund is on the Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

Troy Trojan aims to grow investors' money steadily over the long run, while limiting losses when markets fall, rather than trying to shoot the lights out and perform strongly at all times.

The fund tries to experience less ups and downs than the broader global stock market or a portfolio that's mainly invested in shares. As a result, it could form the foundation of a broad investment portfolio, bring some stability to a more adventurous portfolio, or provide some long-term growth potential to a more conservative portfolio.


Sebastian Lyon has managed this fund since its launch in 2001, using the same investment philosophy that was founded when Lyon helped to set up Troy Asset Management. He has also managed Personal Assets Trust since 2009 – this is an investment trust that is invested similarly to Troy Trojan.

Lyon is also CIO (Chief Investment Officer) of Troy Asset Management. This position takes up some of his time but he’s previously handed over some of the day-to-day company management responsibilities to capable colleagues. This leaves him to focus more of his time on investment management.

Lyon also has support from Charlotte Yonge, who was appointed as the fund's assistant manager in 2018 and carries out analysis across a range of assets. Sian Evans also joined at the beginning of this year. She looks at companies across all sectors like the rest of the team but specialises in ESG (environment, social and governance) analysis. Overall, we think the team at Troy is strong, capable and stable.


Lyon likes to keep things simple, a quality we like. He aims to shelter investors' wealth just as much as grow it.

To do this, the fund is constructed around four 'pillars'. The first contains large, established companies Lyon thinks can grow sustainably over the long run, and endure tough economic conditions. He’s tended to focus on companies based in developed markets, such as the UK and US. This includes some of the world's best-known companies with highly recognisable brands, such as Microsoft and Nestlé. Although the fund hasn’t had much exposure for several years, the manager has the freedom to invest in higher-risk smaller companies.

Following share price falls in February and March of 2020, Lyon used cash to take advantage by investing in companies at more attractive prices and increased shares to roughly 45%. Since then, prices have risen, and he thinks some companies’ shares are too expensive compared with future prospects. He is also cautious about markets, given the uncertainty created by wider economic events.

The manager has therefore recently reduced the amount invested in shares to 36%. For example, the tobacco company Philip Morris International was recently sold and some of the profits were used to buy other investments, while the rest has been held as cash for future opportunities.

The rest of the fund is made up of investments that could bring some stability to the portfolio during more difficult markets. The second pillar is made from bonds. 33% of the fund is currently invested in US index-linked bonds, which could shelter investors if inflation continues to climb. Over the past 12 months, the team has slightly increased the duration of the bond portion of the fund – this is a measure of a bond’s sensitivity to changes in interest rates. They think yields, or the interest rate bond issuers are willing to pay, are unlikely to rise much more from here.

The third pillar consists of gold-related investments, including physical gold, and accounts for 12%. Gold may act as a safe haven during times of uncertainty, or perform well when inflation rises or if key global currencies weaken.

The final pillar is cash, where 5% of the fund is held. This provides important shelter when stock markets stumble. Lyon also invests 14% in UK government bonds as an alternative to cash. They pay a small interest but are very liquid still, so they can be bought or sold quickly, and can be accessed easily if the team find opportunities elsewhere.

While the fund contains a diverse range of investments, it is concentrated. This approach means each investment can contribute significantly to overall returns, but it can increase risk.


We like that Troy's fund managers are dedicated to the same investment philosophy that was established two decades ago. The group has always been clear about the way its range of funds are managed, and the managers don't stray into overly complicated areas of investment markets. Wealth preservation is key, and each manager adheres to this mantra.

Lyon is a part-owner of Troy Asset Management, so we believe he's incentivised to perform, and for his funds and the business to do well over the long term. Other senior members of the group also own a part of the business, and we think this contributes to the stability and loyalty of the team.

While Troy is home to a small, close-knit team of investors, the group has recruited more junior members over the years to boost resource and ensure the funds are left in good hands as and when more senior members retire. Despite the team’s growth we think Troy has remained a very collegiate unit with all members able to have input.

ESG Integration

Troy Asset Management has been formally incorporating environmental, social and governance analysis (ESG) into its investment processes for around five years, but it came from a strong starting point. It has always been focused on the sustainability of returns and the fund managers are long-term investors.

Over the years, Troy has made various pledges which demonstrate its commitment to responsible investing. These include becoming a signatory to the UN-backed Principles for Responsible Investment (PRI), which is a commitment to ESG investing. Troy is also a member of Climate Action 100+, an initiative which aims to increase pressure on the world's largest corporate greenhouse gas emitters to cut emissions.

Troy Asset Management don’t believe in having a separate ESG team. Instead, they believe it’s the responsibility of everyone to integrate ESG analysis into the research and decision-making processes.

The team understands that not every company is perfect, so they’re prepared to engage with the companies they invest in. The aim here is not only to highlight potential ESG related risks but to also influence and improve the behaviours of management, aligning them with the best interests of shareholders.

We believe ESG is comprehensively integrated in this fund, and that the ESG-related processes are robust. That said, this isn’t an exclusions-based fund, which means it can invest in any sector.


This fund has an ongoing annual charge of 0.86%, but we've secured HL clients an ongoing saving of 0.25%. This means you pay a net ongoing charge of 0.61% and makes the fund one of the lowest-cost funds available in the Flexible Investment sector through HL.

The fund discount is achieved through a loyalty bonus, which could be subject to tax if held outside of an ISA or SIPP. The HL platform fee of up to 0.45% per year also applies.


The fund aims to achieve growth ahead of inflation (as measured by the UK retail price index) over the long run, which it’s done successfully since it launched in May 2001. It’s also performed better than the broader UK stock market, which we think is impressive for a more conservative fund. Over this period, the fund has risen 332.09%* compared with 216.92% for the FTSE All-Share.

It's also achieved this with less volatility than the market. But remember past performance isn't a guide to future returns.

Avoiding large losses has been an important characteristic of the fund and it has tended to come into its own and hold up well in weaker markets, such as the bursting of the tech bubble in 2001-2002 and the global financial crisis in 2008. We saw this again in the first part of 2020 when global markets stumbled amid the coronavirus outbreak. The fund is not likely to keep up when share markets are performing strongly, but we expect this given its cautious approach. Importantly we expect it to provide some shelter when markets fall.

The fund almost kept pace with the broader UK stock market over the past 12 months, returning 7.96% compared with 8.72% for the FTSE All-Share. It also held up well during the sharp market fall in February and March this year.

As markets fell some of the fund’s investments in shares detracted from performance. A combination of rising inflation, supply constraints and the crisis in the Ukraine put pressure on businesses. Two of the worst performing companies were Alphabet, owner of Google, and Agilent Technologies.

Other parts of the fund held up well though, including gold investments, which can do well in inflationary environments.

Remember though, the fund will go up and down in value, so you could get back less than you invest.

Annual percentage growth
Apr 17 -
Apr 18
Apr 18 -
Apr 19
Apr 19 -
Apr 20
Apr 20 -
Apr 21
Apr 21 -
Apr 22
Troy Trojan (O Accumulation)** -1.21% 4.93% 8.60% 8.36% 7.96%
FTSE All-Share 8.16% 2.62% -16.68% 25.95% 8.72%
UK Retail Price Index 3.36% 3.04% 1.53% 2.90% 11.13%

Past performance is not a guide to the future. Source: Lipper IM* to 30/04/2022.

**The X unit class of this fund is featured on our Wealth Shortlist. However, we've used the O unit class here as it was launched earlier, and has a longer track record of performance data.

Find out more about Troy Trojan including charges

Troy Trojan Key Investor Information

Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.

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