Trojan Ethical Income Fund
The investment objective of Trojan Ethical Income Fund is to seek to provide income with the potential for capital growth in the medium term. Its investment policy is to invest substantially in UK and overseas equities. Trojan Ethical Income Fund may also invest in fixed interest securities, indices, deposits, collective investment schemes and money market instruments.
The fund will invest in accordance with the parameters of its ethical investment criteria, which consider ethical issues in relation to: fossil fuels, pornography, tobacco and certain types of armaments. A document setting out the fund’s ethical investment criteria is available here.
In addition to the O share class referred to on this page, I & S Classes are also available. Please contact us for more information.
Derivatives may be employed for the purposes of efficient portfolio management.
Investment Performance will not be shown until one calendar year after the fund's launch due to regulatory requirements. Similarly, no information relating to Trojan Ethical Income Fund is included in either the Interim Report or Annual Report.
|'O' Share Class||Price 20/04/2018|
The Fund produced a return of -1.6% in January compared to -1.8% for the FTSE All-Share Index (TR).
In what was another difficult month for equity markets two of the strongest positive contributions to the portfolio’s performance came from GlaxoSmithKline (GSK) and Reckitt Benckiser (RB). This is noteworthy for two reasons.
Firstly, both stocks had been cited as participants in the auction for Pfizer’s consumer healthcare unit. The assets, which include major US vitamins brand Centrum and analgesics brand Advil, were for sale with a price tag in the region of $20bn - a sum that neither suitor could sensibly afford. For this reason the market responded positively to announcements towards the end of the month that both companies had withdrawn from the process. RB can now concentrate on digesting last year’s acquisition of Mead Johnson and rebuilding its balance sheet.
GSK also made what we believe to be an important capital allocation decision. The company chose to buy in the remaining 36.5% of its consumer healthcare JV with Novartis, rather than pursue the Pfizer portfolio. The JV is an asset GSK already knows intimately and the cost of taking full control was a more modest $13bn. In a time of cheap debt such displays of capital discipline are all too rare.
The other noteworthy point about these two stocks is that they have both experienced a significant de-rating over the last 18 months. For the first time in many years GlaxoSmithKline and Reckitt Benckiser are trading at discounts to their ten-year average valuations (as measured by the multiple of earnings on which the share price trades). And they are not alone. An increasing number of our core stocks are nearing this threshold, indicating a significant improvement in the long-term returns that are available from the portfolio for today’s investor.
|Top 10 Holdings||Fund (%)|
|Procter & Gamble||2.8|
|Total Top 10||34.7|
|36 other holdings||56.3|
|Cash & equivalent||9.0|
How to Invest
You may invest directly, via a broker or adviser, or through a number of online fund platforms.
- Fund Manager
- Inception Date
- Available Share Class
O, I, S
- ISIN (O Class)
- Bloomberg (O Class)
- Sedol (O Class)