Troy’s Yonge plays it safe with new Ethical fund

Written by Rebecca Jones on 28th Mar 2019

Another week, another exciting new Good investment fund launch! Responding to what it describes as strong demand from its client base, investment house Troy Asset Management is adding the Trojan Ethical Fund to its stable of funds – now eight large.

Marking the launch, Good With Money caught up with manager Charlotte Yonge, who joined Troy in February 2013 and is also assistant manager on the £4.1 billion Trojan Fund. She explained that Trojan Ethical would closely mirror the group’s leading Trojan fund, but would be playing it extremely safe in current markets.

Yonge says: “Trojan Ethical will be our most conservatively invested fund. It is a multi-asset fund, which means we will invest in a range of different things and right now, that’s 40 per cent in bonds (company loans or debt) one third in equities (shares), 20 per cent in cash and 9 per cent in gold.”

Responding to our collective gasps at such a big slug in cash in gold (usually this indicates a fund manager is preparing for financial apocalypse) Yonge said that while the Troy team were not “calling a recession,” they remained “nervous” about current markets, adding that “equities look vulnerable.”

More broadly, however, the portfolio reflects the cautious approach of the Troy team, which has historically had a closer eye on capital preservation (i.e. not losing money) rather than shooting the lights out in terms of performance.

This doesn’t mean results have been poor, however, with the Trojan Global Equity and Global Income funds delivering some of the best returns in their sectors.

No energy companies

Building on the screening already employed for the firm’s Ethical Income fund (launched in 2016), Yonge says that Trojan Ethical will invest according to three key screens.

She explains: “We will not invest in any company that gets more than 30 per cent of its profits from fossil fuels. In practice this means we don’t have any energy companies. In addition we won’t invest in any firm that gets more than 10 per cent of profits from alcohol, arms, gambling, high interest rate lending, pornography or tobacco.

“For the gold part of the portfolio, we have also made sure that we are using ETFs (Exchange Traded Funds) that comply with the London Bullion Market Association’s Responsible Gold Guidance – ensuring we do everything we can to minimise investing in mines with questionable human rights practices. Finally, we will only invest in companies listed in the UK, US, Canada, France, Germany, Italy and Japan – aka the G7.”

Engage for success

Yonge adds that the team will also build on the already strong work that Troy does on corporate governance across the fund range, where managers have had strong success engaging with companies to influence positive change.

She says this includes Unilever, who the firm engaged with over its plans to move to Rotterdam last year, highlighting historically restrictive shareholder practices, as well as the detriment to the UK workforce.

Likewise, she says Troy’s work with German eyewear manufacturer Fielmann was also productive, with discussions about the lack of women on the board – despite the firm’s staff body and customer base being majority female – prompting a commitment to review this at the next AGM.

Yonge says: “When it comes to investing, we really need to be engaging with both shareholders and investee companies. This is important for all kinds of funds and something we have a strong track record of. Within the Ethical fund we’ll be adding that extra layer, but strong governance and active engagment remain key.”

Trojan Ethical Fund facts:

Fund manager: Charlotte Yonge

Launch date: 22 March 2019

Minimum investment: £1,000 lump sum; £100 per month

Annual management fee: 1 per cent p/a (‘O’ Share Class),

Estimated ongoing charges: 1.02 per cent p/a (‘O’ Share Class)

Where can I invest?: A broker, adviser or low cost fund platform




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