TroyIncomeGrowthTrust > About Us
About Us
About Us

Investment Process


At Troy Asset Management, we try to keep the investment process as simple and intuitive as possible. We only invest in those companies that we feel we thoroughly understand and that we believe have enduring qualities that will allow an investment to compound in value over the long term. We aim to own and not trade investments, so we have to be confident in the ability of a business to deliver growing cash flows into the future.


Troy has a rigorous focus on quality. We invest in businesses with high returns on invested capital which we consider to be sustained by durable competitive advantages. We favour stable and growing companies with a strongly differentiated product or service that new or existing rivals struggle to copy. These are companies with low risk to their earnings that permit sustained high levels of profitability. We pay particular attention to how management allocates capital and typically avoid highly acquisitive and indebted companies.


Having identified companies that meet our quality criteria, we consider making an investment only when, in our view, three further conditions are met: first, their balance sheets are soundly financed so that management can allocate capital flexibly; second, they are managed by people that act in the best interests of shareholders; and lastly, when their shares are quoted at a price that underestimates future cash flows.


In managing the Trust, we tend to avoid cyclical and highly capital intensive companies, in favour of those exhibiting more defensive characteristics, and so usually has a low beta or sensitivity to market moves. Our investment style is such that while our performance may look sluggish in strongly rising markets (often led by cyclical companies), we believe that a portfolio that suffers fewer destructive draw-downs will be in a better position to compound returns over the long run.


The investment approach is to create a concentrated portfolio of these high quality companies, purchased at attractive valuations and held for the long-term. Portfolio turnover is typically low - we think like owners and buy equities to access the long-term future of a business. We want our investments to compound in value steadily over time.


Portfolio Construction


The portfolio is constructed on a bottom-up basis. Whilst quality is the main criteria for inclusion in Troy’s investment universe, valuation is the key criteria to trigger a decision to invest and we will buy a company we like when we believe its share price significantly understates its long-term potential.


Although careful attention is paid to diversification and the risk associated with concentrated exposures there is no reference to sector or stock weightings within the index. We run a portfolio of approximately 35 to 50 stocks and sizing of positions is based on our conviction, however there will not be a single stock position greater than 6 per cent of the Trust for large cap investments, 3 per cent for mid-caps and, on the rare occasions we do invest in them, 2 per cent for small-caps.

The Trust is permitted to hold up to 20 per cent of gross assets in non-UK investments. Cash is held where we believe it has optimum value on a tactical basis.

Our History

Troy Income & Growth Trust is an investment trust which has been managed by Troy Asset Management since July 2009. The Trust was previously known as Glasgow Income Trust and managed by investment house Aberdeen Asset Managers Limited. Since Troy’s appointment, the Trust’s key aims have been to provide investors with a high and regular stream of income that would grow in real terms, to minimise the risk of capital loss by emphasising absolute (over relative) returns and to deliver top quartile performance over reasonable periods (i.e. at least three to five years) while exposing investors to lower than average volatility.


The Trust is co-managed by Francis Brooke and Hugo Ure, with the help of Troy’s Investment Team. 

Investment Objective & Policy
The Trust's investment objective is to provide shareholders with an attractive income yield and the prospect of income and capital growth through investing in a portfolio of predominantly UK equities.

Equities are selected for their inclusion within the portfolio solely on the basis of the strength of the investment case with the focus being on long term income growth along with capital preservation. Asset classes other than equities will be purchased from time to time and will vary as opportunities are identified and will include convertibles, preference shares, fixed income securities and corporate bonds.

Investments will be made when prospective returns appear to be superior to those from equity markets or are considered likely to exceed the Trust's cost of capital including any borrowing costs. However, non-equity securities will not constitute the majority of the portfolio.

The Trust may also use derivatives for the purpose of efficient portfolio management, including reducing, transferring or eliminating investment risk in its investments and protection against currency risk, to exploit an investment opportunity and to achieve an overall return. There are no pre-defined maximum or minimum exposure levels for asset classes but these exposures are reported to, and monitored by, the Board in order to ensure that adequate diversification is achieved.

The Trust is permitted to hold up to 20 per cent of gross assets in non-UK investments.

The Trust does from time to time invest in other UK listed investment companies but the Trust will not invest more than 15 per cent of gross assets in other listed investment companies.

The portfolio will be relatively concentrated and the number of individual holdings in equities and funds will vary over time but, in order to diversify risk, will typically be between 30 and 50. The Board monitors the aggregate exposure to any one equity across the whole investment portfolio.

While there is a comparative index for the purpose of measuring performance over material periods, no attention is paid to the composition of this index when constructing the portfolio and the composition of the portfolio is likely to vary substantially from that of the index.

The Company may utilise gearing in a tactical and flexible manner to enhance returns to shareholders. As an investment trust, the Company is able to borrow money and does so when the Board and the Manager have sufficient conviction that the assets funded by borrowed monies will generate a return in excess of the cost of borrowing. Such gearing may be in the form of bank borrowings or through derivative instruments which provide a geared exposure to equity markets. Gearing levels are discussed by the Board and the Manager at every Board meeting and monitored between meetings and adjusted accordingly with regard to the outlook. No gearing was in place at the year end. However, the Board currently intends that if it did decide to utilise gearing the aggregate borrowings of the Company will be up to 15 per cent of net assets immediately following drawdown, with a maximum level of aggregate borrowings of 25 per cent of net assets immediately following drawdown. The Board will, however, retain flexibility to increase or decrease the level of the Company’s gearing to take account of changing market circumstances and in pursuit of the Company’s investment policy.

Team
Why Troy Income & Growth Trust?

Troy’s Structure and Culture

Troy’s independent structure, strong governance, culture and alignment of interest with our investors are the foundations of TIGT’s strengths, which are:

  • Our distinctive investment approach and the discipline and patience we have to practice it throughout the investment cycle.
  • The quality of our in-depth primary research, which underpins our approach.


Experienced Team

TIGT is co-managed by Francis Brooke and Hugo Ure with the support of Troy’s wider Investment Team. Francis Brooke has an outstanding track record over 15 years of managing UK equity income portfolios, having been the manager of the Trojan Income Fund since its launch in 2004. Hugo Ure has been working alongside Francis on Troy’s UK equity income portfolios since 2009, becoming Assistant Manager of TIGT in 2011 and Co-Manager in 2015. They are closely supported by Blake Hutchins, Senior Fund Manager within Troy’s UK equity income franchise and Fergus McCorkell, the team’s dedicated Investment Analyst. Click here to see further information on the team.


Strong long term, risk-adjusted returns

Our focus is on the ability of the portfolio to generate strong risk-adjusted absolute returns over the long term and sufficient free cash flow to underpin an attractive level of income that grows in real terms. Click here to see the Trust’s performance over time.


Below Average Volatility

The protection of investors’ capital is central to Troy and TIGT’s ethos. We do not generally aim to achieve this by derivative protection; rather our approach is to protect through the selection of high quality companies, with particular attention paid to the downside risk of any investment. Evidence of this can be seen here from the Trust’s maximum drawdown and annualised volatility relative to the FTSE All-Share Index (TR) comparator. TIGT remains the least volatile Trust in the AIC Investment Trust – UK Equity Income sector since Troy’s appointment.


Discount Control Mechanism

In January 2010, TIGT implemented a hard DCM. Excess supply/demand of shares in the market is met by TIGT, which is committed to buying back/issuing stock in order to prevent TIGTs shares from trading at anything more than a minimal discount/premium to NAV (c.1-2% either way). We believe that no investor should be forced to buy at a material premium or sell at a discount to NAV. Click here find more.


Enhanced Liquidity

The DCM also increases the liquidity of TIGT. Subject to certain required shareholder approvals, the DCM has the potential to provide for near unlimited secondary market liquidity for investors.


Oversight of the TIGT board

TIGT has an independent board comprising four directors. Independent boards are a unique advantage of investment trusts and provide an additional layer of oversight and governance for investors.

The Board
David Warnock
David Warnock
Independent Non-Executive Director - Chairman
Jann Brown
Jann Brown
Independent Non-Executive Director
David Garman
David Garman
Independent Non-Executive Director
Roger White
Roger White
Independent Non-Executive Director
Investment Managers
Francis Brooke
Francis Brooke
Co-Manager
Hugo Ure
Hugo Ure
Co-Manager