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 17/08/2017|
The Fund produced a return of -0.3% in June compared to +1.2% for the FTSE All-Share Index (TR).
Although many of the Fund’s investments performed well, the absolute return generated during the month was limited by weak performance from the Fund’s UK pharmaceutical holdings.
The announcement of a failed lung cancer drug trial caused AstraZeneca to fall by more than 15%, effectively reversing the gains of the year to date and returning the share price to its January lows. This was a blow to Astra’s important immuno-oncology franchise. The share price adjustment has reflected the future loss of revenue and we believe the valuation is now reasonable.
GlaxoSmithKline’s quarterly report was received only slightly more positively. The strategy laid out by Emma Walmsley, the new CEO, was greeted with scepticism by a market weary of new initiatives to enhance R&D productivity. This combined badly with a modest downgrade to earnings guidance to precipitate a -4.1% intraday fall. We continue to hold both stocks on attractive yields, in excess of 4.8% and 5.2% respectively.
On a more positive note the Fund’s ethical investment criteria mean that the portfolio is not exposed to the tobacco sector which, following the US regulator’s announced intention to place further restrictions on the industry, was the largest detractor from the FTSE All Share Index’s return. We rarely speak about what we do not own but it is important to highlight how the ethical criteria have the potential to enhance returns by excluding sectors where the activities of an industry expose it to higher regulatory or legislative scrutiny.
At the end of the period the Fund declared a provisional interim dividend of 1.735p which equates to a 1.6% yield on the ex-dividend share price. The relatively modest 2% uplift is a reflection of a desire to rebalance the total annual distribution in favour of the final dividend. The income account remains robust and the prospects for the full year are encouraging.
|Top 10 Holdings||Fund (%)|
|Total Top 10||30.1|
|36 other holdings||59.8|
|Cash & equivalent||10.1|
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)