The Company’s investment objective is to seek to achieve long-term capital growth with some potential for income.
Investment Manager’s Commentary
Your Fund returned -1.8% during the month compared to -1.9% for the MSCI World Index NR (f).
Returns were affected by the strength of sterling following the announcement of the forthcoming UK General Election. This reduces the returns from the Fund’s assets held in overseas currencies and reverses some of the extraordinary currency gains made last year. Were returns to be measured in the Fund’s other main trading currencies – US dollars or Swiss francs- this month’s returns would have been positive.
As a reminder, the Fund does not seek to manage currency volatility with hedging contracts. This is for a couple of reasons. First, it adds complexity that is likely to result in higher costs counted in transaction fees and timing errors – that lower returns. Second, our favoured companies typically do business around the world, so whilst strong overseas currencies enhance sterling-based returns they limit revenue and earnings growth for the Fund’s foreign companies. This has been profound for US multinationals, such as Coke and P&G, which have struggled against a strong dollar for the last five years. Were this trend to unwind, the Fund might lose in the translation of asset returns back into sterling but gain from a resumption in these companies’ earnings power. We conclude that our energies are best focussed on the dependability of corporate earnings rather than the vagaries of currency markets.
*Source: Troy, Bloomberg 30th April 2017
Total Gross Assets: £104,416,153
(As at 30.04.17)
NAV Frequency: Daily
Legal Status: Open Ended Investment Company
IMA Sector: Global
Dividends: February and August
Investment Manager: Troy Asset Management Limited
Authorised Corporate Director: Carvetian Capital Management Limited