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 -3.9% during the month compared to -1.1% for the MSCI World Index NR (£).
Performance has been frustrating in the past few months. Despite many of the Fund’s holdings performing well, performance has been lacklustre. Investments in technology companies such as Microsoft, Alphabet, eBay, Fiserv and PayPal have been substantial drivers of returns in recent years and this trend has accelerated in 2018. At the same time, shares in consumer staples companies such as Unilever and Nestlé have sold off and in many cases are now trading on close to 5 year p/e lows. We are not believers in the argument that these companies are ‘bond proxies’ that will inevitably do badly in a rising bond yield environment. More credible are the concerns around the competitive environment, pricing power and growth in a digital age. The consumer goods companies are having to adapt quickly to the changing distribution landscape, the rise of hard discounters and new challenger brands, the immediate price discovery that the internet facilitates and the rise of digital advertising away from traditional media. Companies like Colgate, Unilever and Nestlé have faced existential threats before in their long histories. All the attributes which have made them core Troy holdings over the long term – high repeat-purchase rate, strong cash generation, high margins and global distribution – give them the strength to adapt and invest. Although consumer staples are a smaller percentage of the Fund today the shares remain an important component of the portfolio.
Total Gross Assets: £96,267,481 (As at 28.02.18)
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