Troy Trojan Global Income Class O - Income

Our conviction in Harries stems from his long-term track record. At Newton he built an impressive record managing their global income fund. The Troy Trojan Global Income Fund has underperformed the IA Global Equity Income sector since launch. That said, the fund has taken less risk than many others and we are confident in his longer-term abilities.

Given Harries' focus on high-quality companies we expect the fund to hold up relatively well when markets fall, which happened during the depths of the crisis in March 2020 and since launch. In contrast, we expect the fund to lag the peer group when markets are rising quickly. Not owning companies that are highly sensitive to economic conditions has hindered short-term performance.

Protecting investors' wealth has always been the most important thing at Troy. The managers believe that's the best starting point for growing wealth over the long term. All Troy funds are run along the same lines disciplined and patiently investing in a small number of high quality holdings.

Harries' investment approach is similar to other Troy fund managers. He looks for large, financially sound companies that have shown their resilience through both good and bad times for the wider economy. He mainly focuses on developed markets, such as the US, Europe and the UK. While he has the flexibility to invest in higher-risk emerging markets, he tends to avoid them, preferring companies that sometimes sell their products in these regions.

Given the manager's long-term approach, new purchases and sales are kept to a minimum. Only a few new ideas are considered each year, and the manager only sells shares if he feels the outlook has changed, the company becomes too highly valued, or he finds a better idea elsewhere.

This is a concentrated portfolio of between 30-40 holdings. That means each company can have a significant impact on performance, although it's a higher-risk approach. Every holding 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 long-term returns.

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, if used, increases risk.