Manager's Monthly Report

The Trust produced a Net Asset Value total return of +2.1% during the month and a price total return of +2.5%, compared to a return of +1.9% for the FTSE All-Share Index (TR). Markets moved higher, led by commodity stocks which responded favourably to positive macroeconomic data. US GDP growth in Q3 of +3.0% was better than expected, while the Eurozone continued to exhibit signs of recovery.

The continuing cyclical bias in the equity market favours sectors like mining and housebuilding where we struggle to find value, but positive stock selection in the sectors we do own enabled the Trust to deliver a robust performance over the month. Within the portfolio the most notable transactions were to reduce AstraZeneca after a strong recovery in the share price and to increase BP which had lagged somewhat.

Two of the strongest performers in the Trust this month were Hiscox and Lancashire. Both are specialist insurers with particular areas of underwriting expertise which have in recent years returned surplus capital to investors in the form of special dividends. This year, the prospect of firmer rates has led these companies to retain surplus capital in order to increase underwriting capacity. We rarely budget to receive special dividends so this will not impact our projection for the Trust’s income account.

We are pleased to confirm that Mark Wharrier arrived at Troy in October to join the UK Income team. His extensive experience in managing UK equity portfolios, particularly those with an income orientation, is highly complementary and he will be a great addition to our team.

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