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 +3.5% during the month compared to +2.9% for the MSCI World Index NR (£). Technology companies led returns for the Fund and the index.

Many investors worry that market action has become dominated by a handful of global tech companies. The FANGs (Facebook, Amazon, Netflix and Google) are monitored closely for signs that the bull market in equities is coming to an end. We share these concerns. Growth is scarce and wherever it can be found it is often pricey. We also point out, however, that much of the tech sector’s growth is real and durable. Nor do sinister acronyms capture the big differences between tech businesses. We contrast cash-hungry Netflix, priced at 95x estimated earnings, with Alphabet, the owner of Netflix’s rival YouTube, and Google’s parent company. Alphabet generates a phenomenal $6bn to $7bn in free cash flow per quarter and has in excess of $100bn in cash on its balance sheet. Its shares trade at 26x estimated earnings cheap compared to Netflix, but expensive by the standards of conventional measures of value. Yet few other companies owned in the Fund have as strong a base business as Google has in internet search, and no other is growing so fast (at over +20% p.a). Current earnings estimates must also account for the way that idle cash and heavy investment (in things such as driverless cars and artificial intelligence) suppresses evidence for Alphabet’s earnings power. It is therefore possible to feel nervous about the FANGs in abstract whilst feeling very confident about owning one of its members.


Fund Details
Total Gross Assets: £102,367,548
(As at 31.10.17)
Dealing: Daily
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