Troy’s defensive stance leads to underperformance this year – For the year ended 30 September 2017, Troy Income & Growth returned +5.9% in NAV terms and a share price total return of +4.0%; the All-Share Index returned +11.9% for the period. The aggregate dividends for the year totalled 2.56p and represented an increase of 5.6% over the previous year. In its 20-strong peer group, TIGT was positioned 18th over the 12 months. The chairman and the manager attribute this to the defensive positioning of the portfolio.
There is very little mention of which stocks contributed to the performance of the fund. The manager says “The company’s emphasis on defensive quality can mean that, although it has preserved capital well in periods of weakness, performance has sometimes lagged in particularly ebullient phases of market behaviour. We found ourselves in such a phase during the final quarter of 2016 and the first weeks of 2017. As investors bought into the reflationary rhetoric that surrounded the election of President Trump, cyclical and value stocks, underrepresented in Troy’s portfolios, performed notably well.” More recently, a significant failure by Provident Financial in the execution of the restructuring of its home collected credit business, regulatory intervention in the tobacco sector and disappointing news flow from Reckitt Benckiser all detracted meaningfully from performance. This was offset as Next and Equiniti in particular rose, allowing the company to deliver a near flat return over the final three months to 30 September 2017.
TIGT : Troy’s defensive stance leads to underperformance this year