Troy Trojan Global Income: January 2026 fund update

• James Harries is a highly experienced income fund manager with a long track record

• Protecting investors’ wealth during market uncertainty is the focus of Troy’s investment approach

• The fund has typically experienced less volatility than its peers

• 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

The Troy Trojan Global Income fund aims to deliver long-term capital growth while also providing a steady income. The fund managers look to grow income gradually over time rather than seeking higher but potentially unreliable dividend yields, meaning there’s a focus on higher-quality companies. They believe investing for income globally is optimal as it provides a broader hunting ground than a single country or region.

Given its focus on quality, this fund could work well alongside investments in out-of-favour companies with recovery potential – also known as ‘value’ investing. Given its more conservative approach, it could complement more adventurous funds or those targeting greater capital growth that don’t tend to pay dividends. Its global approach could add diversification to an income-focused investment portfolio.

Manager

James Harries has managed this fund since launch in November 2016. He joined Troy in 2016 from Newton, a subsidiary of BNY Mellon, where he began managing global income funds in 2005. Harries is an experienced global income manager and one we hold in high regard.

Harries is supported by co-manager Tomasz Boniek. He joined Troy from Susa Fund Management in 2017 and holds an MBA from the London Business School.

In November 2020, Harries and Boniek took over management of the Securities Trust of Scotland, a closed-ended fund (investment trust) that invests in a similar way to this fund. They also manage the Troy Trojan Ethical Global Income fund. Given the overlap between the three funds, we believe they’re comfortably able to manage their responsibilities.

Process

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.

The team pay close attention to free cash flow, a key measure of dividend predictability. It shows what cash a business has left over from running operations that can then be used for other purposes like paying a dividend, buying back shares, or reducing debt obligations. A company that generates healthy levels of free cash flow will, in theory, be able to sustain, or even increase, how much it returns to shareholders.

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. Harries also has a strict approach to company valuations and won’t pay more for a company’s shares than he believes they’re worth, regardless of the potential for future growth.

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. Geographically, 38% of the fund currently invests in the US, although this is less than the broader market (the benchmark). 33% is also invested in UK businesses. Sector wise, the managers find the most opportunities in consumer staples and industrials companies.

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.

Over the past 12 months, Harries bought shares in sportswear company Nike, a company the team have followed for a number of years. Harries believes the company’s shares are attractively valued and he has growing confidence in the new CEO. A new investment was also made in US food distributor Sysco.

Investments in Medtronic, a medical devices manufacturer, and US chocolate company Hershey were sold. The team retain a favourable view of Hershey but believe the growth of the confectionary industry is slowing and there are currently better opportunities elsewhere.

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.

Culture

Troy Asset Management is an independent ‘boutique’ investment company founded in 2000. The majority of the business is owned by the company’s management and fund managers. We view this positively, as it means both the business and the funds are managed with a long-term view. It also helps align fund managers’ interests with those of investors.

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.

ESG Integration

Troy integrates environmental, social, and governance (ESG) issues using a materiality-based approach, meaning the managers focus on the issues they deem to be most important to the company’s investment prospects. They also have access to third party ESG data and research. How analysts and fund managers engage with ESG, and the overall quality of their research, is considered when calculating their incentivisation packages.

Engagement and voting are the responsibility of the investment team. All votes are discharged and usually cast in favour of management proposals, unless the team believes investors’ interests are better represented by abstaining or voting against company management. Their preferred course of action is to have dialogue with management ahead of casting votes against their recommendations.

The firm provides a proxy voting portal where investors can see every vote exercised, although no rationales are provided. That said, Troy publishes a summary of significant votes in its annual Engagement and Voting Disclosure report, along with rationales for voting both for and against proposals. The firm also produces a quarterly Responsible Investment report, which includes voting and engagement updates and case studies, alongside other responsible investment-related research.

This fund isn’t managed to a responsible mandate but ESG factors are considered as part of deciding whether to invest in a particular company. As of November 2025, 10.9% of the fund is invested in tobacco companies. The managers also manage an ethical version of this fund, which uses the same approach but doesn’t include companies that make most of their profits from tobacco or alcohol.

Cost

The fund is available for an annual ongoing charge of 0.90%. Our current platform charge of up to 0.45% per annum also applies, except in the HL Junior ISA, where no platform fee applies. From March 2026, the amount clients pay to invest with us will change. Find out more about these changes.

Performance

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, returns of 84.98%* trail the IA Global Equity Income sector, where the average fund has returned 113.00%. Remember, past performance isn’t a guide to the future.

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.

This is in keeping with Troy’s investment approach, where a focus on high-quality companies means we typically expect the fund to hold up relatively well when markets are falling. In contrast, we expect the fund to lag peers when markets rise quickly. This has been the case recently, including over the last 12 months when the fund returned 5.58% compared to the peer group average of 12.67%.

This level of underperformance is more than we typically expect and is partly as quality investing has been out of favour recently. This has been a headwind for funds, like this one, that invest using that style. On the other hand, funds investing in more economically sensitive sectors, such as banks, have done better. Harries tends to avoid this type of company because they don’t meet his strict quality criteria or offer the same long-term growth opportunity as quality companies, in his view. You can read more about these recent market trends and the impact on funds here.

Stock selection (the ability to invest in companies that go on to perform well regardless of the sector they’re in) has also held back recent returns. This was particularly the case in the industrials and technology sectors. Over the past year, investments that detracted from performance included US firm Paychex and UK company RELX. Both have been hurt by uncertainty around their future in an AI-driven economy. Harries believes we’re at an early stage of artificial intelligence (AI) adoption and it’s too early to determine the winners and losers, so he retains conviction in both companies.

Tobacco companies Phillip Morris and British American Tobacco were among the top performing investments in the fund over the past 12 months. The managers reduced the investment in Phillip Morris after its strong performance meant they felt its shares no longer had as much growth potential. Swiss healthcare businesses Roche and Novartis also contributed positively to performance.

We recently met with Harries and Boniek to discuss the fund’s performance. They expressed their disappointment with recent performance but remain optimistic for the future. The share prices of several companies they monitor have become more attractive, giving them an opportunity to invest. We believe the managers are sticking to a process that has served them well over the years and we retain conviction in the fund’s performance potential.

The fund will likely struggle if quality companies continue to underperform. However, the fund offers diversification from technology companies associated with AI adoption, so it could perform well if these companies struggle or during an economic slowdown.

The fund’s historic yield was 3.05% as at end of December 2025, which is higher than the broader global stock market yield of 1.59%. Yields are variable and not a reliable indicator of future income.