Fund Objective

The Trojan Investment Funds all have an absolute return objective and any comparisons against indices are for illustrative purposes only. The Trojan Income Fund is an equity biased fund that aims to provide growing levels of income that are in excess of the yield offered by the UK equity market.

View on Past Performance

Having described September as a "shocking " month for markets, October looked like being even worse. Only a last minute rally resulted in the total return of -11.9% being slightly less poor than the previous month. The Fund return of -3.8% was partly attributable to the defensive characteristics of the portfolio going into the downturn and also due to raising equity exposure when buying opportunities became particularly abundant.As a result the Fund's equity exposure began the month at 83% and finished at 90%, the highest it has been since launch. This was achieved predominantly by adding to existing holdings such as AstraZeneca, BP, Severn Trent, Vodafone and Cadbury. Two significant new holdings were purchased, BG Group and a 3I Group convertible yielding 18% to redemption in 2011.

Future Expectations

Recent market volatility will continue to throw up anomalies such as this which we will continue to seek out. Purchases of equities were funded by cash and the sale of short-dated gilts. With cash returns dwindling as base rates fall, sustainable equity yields will look increasingly attractive to investors seeking real income growth.

Fund Details