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Trust Insider: where did it all go wrong for Troy Income?
by James Carthew on Dec 03, 2013 at 00:01
DIVI’s portfolio, with its bias to small cap stocks, has benefited as UK equity managers have been allocating more money to smaller companies; the same is true for Lowland. Small caps even outperformed in September when the US shutdown was troubling large cap stocks.
TIGT’s net asset value is up 17.6% over the past year versus the peer group average of 30.4%. Comparing TIGT’s portfolio to Perpetual Income & Growth (PLI, up 36.8%), one notable absence in Troy’s is British Telecom. BT is PLI’s largest holding and has risen almost 70% over the past 12 months.
PLI has also benefited from the remarkable recovery in Thomas Cook’s share price, and decent performance from Roche. In TIGT’s portfolio the holding in Newmont Mining has been unhelpful but it did not have any other exposure to the underperforming mining sector.
Further down the list of holdings there is a marked divergence between the funds but I do not feel qualified to pronounce one portfolio more risky than the other.
I suppose the test for TIGT will come when the market takes a turn for the worse. If its portfolio proves to be more defensive in a downturn, investors’ patience will be rewarded.
When Troy was appointed manager to Personal Assets, I wondered whether I would have kept faith as the Trojan fund underperformed in almost every calendar year for a decade except for 2008 when it did so well it turned out to be one of the best performing funds in its sector over the long term.
I am not a holder of TIGT though and I think for now, I will stick with my holding in PLI.
James Carthew is director at Sapient Research
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