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  • Fund

    A way for individual investors to pool their money together, allowing them to invest in assets that would otherwise be unobtainable

  • Fund manager

    The person who decides where the fund's money should be invested. As such, finding a talented manager (such as those with a Citywire rating) is of paramount importance

  • Sector

    Funds are grouped together into sectors, allowing fund managers to be judged against their benchmarks and peer group. Each sector has rules about what assets funds are allowed to invest in

  • Assets

    A generic term meaning 'what you own'. If you can buy it, it's an asset. In the world of investments the most common assets are shares, bonds, property and cash.

  • Asset class

    A group of assets with similar properties. For example, while shares will rise or fall in price individually, economic factors can affect all shares similarly. The same economic factors might affect bonds very differently – so shares and bonds are separate asset classes.

  • Asset allocation

    The process of deciding which asset classes to invest in. Successful asset allocation is often more important than selecting individual assets (for example deciding whether to invest mainly in shares, rather than which shares to invest in). Since most fund managers are tied to their sector rules, you need to either do your own asset allocation or buy a managed fund.

  • Benchmark

    A measure of how different areas of the markets are performing, against which funds can be compared. For example, a fund in the UK All Companies sector might be compared against the FTSE All-Share index of every company traded on the London Stock Exchange. A good fund manager will be able to beat the benchmark most of the time, but very few can.

  • Securities

    A contract representing something of financial value. Shares and bonds are the most common types of securities.

  • Managed funds

    Unlike most funds, which are restricted to investing in particular markets by the rules of their sector, managed funds can invest in just about anything. While they can have subtly different objectives, they are split into 'Active Managed', where the manager is given free reign; 'Balanced Managed', where the manager can invest a maximum of 85% in shares to reduce risk; and 'Cautious Managed' with a 60% maximum in shares.

  • Shares

    A share in a company represents part ownership of its assets (e.g. its buildings, intellectual property and so on) and its future income (paid out as dividends). The value of a share depends largely on other investors' expectations of the company's future growth and income.

  • Bonds

    Companies can issue bonds as a way of raising money. When you buy a bond, the company is agreeing to pay you a fixed income (hence the alternative name 'fixed income securities') for a certain time period, after which your money is repaid. If investors suspect a company may be unable to repay, they will demand a higher income or 'yield' - hence 'high yield bonds'.

  • Risk

    In investing, 'risk' can refer to different things, but essentially means the possibility that your objectives won't be met. In this context, risk is a calculation of the 'standard deviation' of returns each month – in otherwords, a measure of how rocky the returns are. The higher the rank, the less risk the fund takes with your money.

  • Sharpe Ratio

    This is a way of calculating 'risk adjusted returns' – i.e. how much value the fund is adding above the risk it takes to generate its returns. The higher the number the better.

  • Return

    A measure of how your investments have performed, relative to your initial investment. For example if you invest £1,000 in a fund, and a year later your investment is worth £1,100, you've made a 10% return.

  • Maximum loss

    Comparing the maximum loss for different managers (or between a manager and their benchmarks, as on these factsheets) over a given period is a good way of seeing who's doing the best job of safeguarding investors' money. Otherwise known as maximum 'drawdown', this is a measure of how much you would lose if you bought an investment at its most expensive and sold at its cheapest. For example if a fund was worth £1 a unit at one point but then fell to 50p – regardless of what happened in the meantime – the fund's loss would be 50%.

Citywire Selection


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Ranked 23/37 in Mixed Assets - Absolute Return over 3 years

TOTAL RETURN over 1 month to 25/04/2014


 Trojan  Benchmark

Who runs this fund?

Fund Group


How this fund has performed over

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Maximum loss on £1000

How Trojan compares to the sector over

How has Trojan performed?

  • Fund Performance
  • Return
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How Trojan compares to the sector over

Sectors: What is this fund investing in? Updated 28-02-2014

Top 10 holdings Updated 30-11-2013

News about: Trojan

  • Fund information

    • Launch Date 30 May 2001
    • Share Class size £2236.1m
    • Base Currency GBP
    • ISIN GB0034243732
  • Purchase Info

    • Minimum initial investment £100000
    • Minimum additional investment N/A
  • Charges

    • Annual management charge1%
    • Initial chargeN/A


Sebastian Lyon, manager of the Trojan fund, has poured cold water on any meaningful economic recovery taking place. He is also sticking to inflation-linked bonds and gold as key plays, despite falling inflation and a tumble in price for the precious metal.

Most fund managers have been positive in recent months about a sustained US recovery and the UK following suit, albeit more slowly. But Lyon is going against the consensus view.

‘We do not see a resilient economic recovery taking shape. Our view remains that the current cycle is different from previous post-war economic recoveries. We anticipate growth in the West of up to 2% rather than previous trend growth, as the leaden weight of government and consumer debt dampens demand,’ he says.

Although he admits the UK outlook is more favourable than a year ago when a triple-dip recession was on the cards, he believes measures taken in the housing market are not a long-term solution.

‘We are now approaching the higher end of this growth range – but only thanks to policies such as Help to Buy, which are no panacea to the challenges we face. Encouraging taking on higher amounts of consumer debt is unlikely to work this time due to the law of diminishing returns.’

Track record

With an exceptional track record of producing positive returns for 11 consecutive calendar years since launch, the fund looks set to have its first negative year in 2013. So far it has dropped 2.2%.

Gold has been a key detractor and is currently 11% of the portfolio, along with 3% held in gold miners. These positions strongly benefited performance in recent years but Lyon is sticking to his exposure. He believes the secular bull market for gold is not over despite a ‘nasty correction’ in 2013.

‘An exit from unconventional monetary policy in a benign manner will be highly problematic, if not impossible to engineer. We require an insurance policy for such an eventuality. The expectation today is that the Federal Reserve will taper and the Bank of England will succeed in reversing quantitative easing. We question that assumption.’


Lyon’s uncertainty around central bank intervention and the effect on currencies are also crucial reasons for holding 26% in inflation-linked bonds. At the same time, he believes Western central banks want to avoid the Japan’s deflation experience in the 1990s.

‘While we would not rule out a short-term deflationary shock that would do our linkers no favours, they would be far more damaging to the overextended equity market. This is a reason why we also hold cash.

‘There are few signs that we are in a world where the relay race to debase currencies is over. Owning some US Tips and UK linkers protects us from that eventual debasement.’

High valuations

With cash at 17% of the £2.4 billion fund and Lyon seeing a lack of positive surprises in store, he unsurprisingly thinks equity markets have got ahead of themselves and finds little compelling value. ‘We are five years into an equity market rally, which in the US is the longest unbroken recovery streak without any meaningful correction since the 1930s.

‘There are early signs some of our favoured sectors – consumer staples in particular – have begun to underperform as investors have rotated into more cyclical stocks. We are hopeful that will prove to be a fertile prospect for bottom-up stock picking in 2014. Our equity allocation has begun to creep up slightly but we are unlikely to have a material shift until we have seen a significant correction.’

Over five years to 30 November 2013, the fund has returned 51.7% versus 44.6% for the average fund in Citywire’s Mixed Asset Absolute Return sector.

Citywire Selection Verdict: Sebastian Lyon has steered the fund to eleven consecutive years of positive returns. This calendar year looks set to see a small negative performance however, which we consider as a minor blip.

His admiration of gold, which is viewed as a key inflation hedge due to the scale of quantitative easing, has not abated despite sharp falls in 2013.

A third of the portfolio is in high yielding blue chip equities and index linked bonds are also favoured. Cash is at around the 17% mark due to Lyon’s fears over central bank policies, historically low global growth and high equity valuations.

For more details please view the latest factsheet.  

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