Troy Trojan Income: June 2026 fund update

• The investment team at Troy works collegiately and is well resourced, experienced and aligned with investors

• Given its focus on quality, we expect the fund to hold up better in falling markets, and to lose ground relative to its benchmark in a rising market

• Performance has been disappointing compared to both the benchmark and peers investing in a similar way

• This fund does not currently feature on our Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

The Troy Trojan Income fund aims to generate a combination of income and growth over the long term. As the manager focuses more on companies able to sustainably grow income over the longer term, rather than those paying a high income today, it might not appeal to portfolios invested for a high level of income. Overall, this is a more cautious income fund. It could form part of an income portfolio, or a broader portfolio looking to add investment in larger UK companies.

Manager

Blake Hutchins is manager of the fund. He joined Troy in 2019 from Investec Asset Management where he was lead manager on the UK Equity Income fund and co-manager on the Global Quality Equity Income Fund. Prior to that, Hutchins managed retail and institutional UK equity funds at Columbia Threadneedle.

Hutchins’ background and experience mean he’s well placed to lead on this fund. He has learnt from a number of excellent fund managers over his career, honing his approach to investing in quality companies for income.

Hutchins is supported by assistant fund manager Fergus McCorkell who joined the business in 2017. He also has the support of Troy’s wider investment team. The team works collaboratively with a common approach to investment.

Process

Hutchins looks for high quality, resilient companies that can generate sustainable and growing cash flows. This supports the dividends paid to shareholders and could help the business reinvest for future growth. He also looks for companies with a sustainable competitive advantage over peers – known as ‘economic moats’. These companies are often market leaders within their field and enjoy barriers to entry which are likely to deter potential competitors from entering the industry.

High-quality companies and sheltering capital is a firmwide focus at Troy. It’s what makes their approach different to many others, and as a result performance will also be different at times. The approach aims to provide a growing income and shield investors from the worst of market falls, though this is not guaranteed and the fund may fail to keep pace with rapidly rising markets.

In recent months there have been some changes to the fund, Hutchins added financials company IG Holdings, aerospace and defence company Melrose and US insurance company Chubb. He has sold a number of companies including, fast food company Greggs, drinks manufacturer Fever-tree and self-storage company Big Yellow Group.

The fund tends to be concentrated with between 35 and 50 investments, which means each one can have a meaningful effect on performance, though this approach increases risk. As at 30 June 2026 there were 37 holdings in the fund.

Culture

Troy is a privately owned company, set up in 2000 by fund manager Sebastian Lyon with the backing of Lord Weinstock. 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.

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 integrates using a materiality-based approach, meaning the managers focus on the issues they deem to be most material to the company’s investment prospects. They also have access to third party Environmental Social and Governance (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 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 its ‘significant’ votes in its annual ‘Engagement and Voting Disclosure’ report, along with rationales for voting both in favour 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.

Cost

The fund has an annual ongoing charge of 1.04%, but through Hargreaves Lansdown you can secure an ongoing saving of 0.40%. This means you’ll pay a net ongoing charge of 0.64%. The fund discount is achieved through a loyalty bonus, which could be subject to tax if held outside of an ISA or SIPP.

Our platform charge of up to 0.35% per year also applies, except in the HL Junior ISA, where no platform charge applies. Please note the fund takes charges from capital, which could boost the income paid, but reduce the potential for capital growth.

Performance

Since Hutchins became manager of the fund in October 2019, the fund has delivered returns of 12.7%, compared with returns of 77.7% from the FTSE All Share index over the same period. This is disappointing and we would have expected the fund to have performed better over this period.

Our analysis also suggests the fund hasn’t done as well as some of their peers who invest in a similar way, including struggling to grow the income paid to investors in line with peers, which is disappointing. Past performance should not be viewed as a guide to future returns.

The interest rate rising cycle has proved a challenging period for the fund. The long-term investment horizon for quality companies means they are particularly vulnerable to rising interest rates, while companies that have performed well have generally not met Hutchins’ quality threshold. This wasn’t helped by the manager being slow to trim stocks held in the fund that had performed well and which subsequently fell in value.

Given the fund’s quality bias, we typically expect the fund to hold up better than the index in falling markets, which has been the case. However, while we don’t expect the fund to outperform in a rising market the level of upside participation has been disappointing and again been weaker than some peers.

Over the last 12 months to the end of June 2026, the fund returned 2.6%, lagging behind the 21.9% return from the FTSE All Share index. Over this period, our analysis suggests that the fund’s investment in financials company London Stock Exchange Group (LSEG) and chemicals company Croda hurt performance, while not owning aerospace giant Rolls-Royce and HSBC also hurt relative performance.

Hutchins’ investment in industrial company Diploma performed well, as the company continues to exceed market expectations. Hotel company InterContinental Hotels Group and financial service company IG Group also performed well over the last 12 months.

As at the end of June 2026, the fund has a historical yield of 2.9% compared to 3.1% for the FTSE All Share. Income isn’t guaranteed, and yields aren’t a reliable indicator of future income.