Monday, 2 August 2021

Trojan Ethical Fund - Portfolio Addition


This fund was added to my defensive portfolio following the dramatic market turmoil at the start of Covid last year. As the year unfolded and the markets started to rebound I sold the fund along with many other investments to fund my house move which was completed last November.

At the start of 2021 my portfolio was 100% equities but I am now starting to rebalance my allocation to build back up some of the defensives which were sold off last year. In the past week or so I have reduced my Google, Microsoft and NIBE shares after a really strong run this past year - Google up more than double since purchase last April and Microsoft up 75% - and the proceeds have been divided between iShares Index Linked Gilts (INXG) and this defensive ethical fund.

2 Yr Chart...Google v FTSE All Share Index
(click to enlarge)

What It Does

This is a multi-asset fund aiming to deliver above-inflation growth. The assets are similar to the larger Trojan Fund but subject to ethical considerations. Therefore all investments are screened to exclude Arms, Pornography, Tobacco, Fossil Fuels, Alcohol, Gambling and High-Interest Lending. The fund will only invest in securities guaranteed by the G7 countries - UK, US, Canada, France, Germany and Japan.

The fund was set up in March 2019 to complement their Ethical Income Fund and is managed by Charlotte Yonge who has been with Troy since 2013 and who also co-manages their £4bn flagship Trojan Fund with Sebastian Lyon. The emphasis is very much focused on the preservation of capital which is now starting to become more of a focus for me rather than attempting to make more and more profits. Returns have been very acceptable for a defensive fund...7.2% in 2019, 10.9% in 2020 and 4.6% to end June.

Trojan Ethical 1 yr Chart (click to enlarge)

Total return since March 2019 is 24.4% compared to FTSE All Share 10.2%.

Holdings

Asset allocation will vary but currently

Global Equities           35%

UK Equities                  8%

IL Bonds                     31%

Gold                            12%

UK T Bills                     8%

Cash                              6%

Some top equity holdings include Microsoft (5.7%), Google (5.3%), Visa (4.4%), Medtronic (3.8%), Unilever (3.5%), American Express (3.3%), Nestle (3.1%).

I am starting to become concerned about the levels of borrowing and QE arising from the prolonged Covid situation as well as the slow progress from our so called leaders on the climate crisis. I will expand upon these concerns in a future article but I am starting to see a few bears on the horizon so it just feels like a good time to reduce equities and start moving some of my portfolio back into safer waters.


The purchase price was 119p and fund accounts for just 4% of my green portfolio.

As ever, this article is merely a record of my personal investment decisions and take on the risk/rewards associated with the current markets. It should not be regarded as an endorsement or recommendation - always DYOR!

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