Fund Profile


This is a non-independent marketing communication commissioned by Troy Asset Management. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

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Troy Income & Growth Trust (TIGT) is designed to be a conservative, buy-and-hold, long-term savings vehicle that will generate income as well as both capital and dividend growth via a portfolio of high-quality companies which are predominantly listed in the UK.

In the managers’ words, since 2019 the Portfolio has been “recharged”, with the Dividend of the trust being lowered to ensure that the focus on quality is not being compromised, as the managers believe that the higher yields available in the UK market are becoming fundamentally unsustainable. On a historical basis the yield is presently 2.6%. As discussed under Performance, the managers believe that the focus on quality will best serve investors in the long term, and to date this approach has outperformed the benchmark with significantly lower volatility since inception of their mandate in 2009. However, the avoidance of banks, miners, etc. may result in short-term underperformance when more cyclical ‘value’ stocks rally, as happened in the most recent reflation trade.

Alongside long-term sustainable income and capital growth, the trust aims to preserve capital, which fits in naturally with the focus on quality and the avoidance of speculative investments. Additionally, the managers and board have been circumspect regarding Gearing, having not employed this option to date (though they could do so in the future). Alongside NAV volatility, Discount volatility is carefully controlled via a highly active discount control mechanism. These factors have resulted in TIGT exhibiting significantly lower volatility and lower maximum losses than its peers, which means that to date investors have been able to access the growth potential of TIGT without taking on excessive risk.

Analyst's View

It is not uncommon for managers to claim to be active, long-term investors whilst in fact obsessing over quarterly results and relative performance versus a benchmark, rather than focussing on growing their investors’ capital. In taking the difficult decision to rebase the trust’s Dividend with the aim to secure future capital and dividend growth, both the board and manager have demonstrated a commitment to long-term decision-making. If an investor has a similarly long-term time horizon and desires a holding that can deliver sustainable future growth and income without taking excessive risks, then TIGT could appeal.

Another demonstration of long-term thinking was the February 2021 announcement that Francis Brooke would be stepping down from Management responsibilities in January 2022, with Blake Hutchins and Hugo Ure continuing as co-managers. Blake has been co-managing the trust since October 2020 alongside his colleague Hugo, who is a decade-plus veteran at Troy. In our view, announcing these changes a year in advance whilst having had Blake come on board is evidence of thoughtful and long-term succession planning. In terms of management style, we do not believe there will be a radical change in the investment philosophy or process of the trust.

An important consideration for an income investor is the trust’s present level of income and how this will evolve versus current and future income requirements. The dividend rebasing has materially lowered the current yield of the trust, and if an investor has an immediate need for a higher level of income this could prove challenging. However, the rebasing was performed in order to improve the prospects for both future capital and income growth and to improve the long-term sustainability and reliability of TIGT’s income.

bull bear
Capital preservation, absolute return approach leads to lower volatility and superior downside protection
Lower-risk, ungeared portfolio may underperform peers in a strong market rally
Highly liquid with tightly constrained discount volatility due to highly active discount control mechanism
Quality growth style may underperform in rallies led by lower-quality, cyclical ‘value’ stocks and sectors
Quality focus and rebasing of dividend have improved outlook for future income sustainability and growth
The trade-off for future growth is a lower present dividend yield
Continue to Portfolio

Fund History

06 Dec 2023 Fool's gold
Cash would have been a poor investment through this period of high inflation…
11 Oct 2023 You say potato
Despite being in the same sector, investment trusts in the UK Equity Income sector could be more lowly correlated than you might think…
03 Aug 2023 Fund Analysis
UK equities still look cheap, yet TIGT’s portfolio holdings are proving relatively resilient…
07 Jun 2023 Under pressure
We identify the equity trusts which have delivered the best downside protection in recent years...
16 Nov 2022 Fund Analysis
TIGT aims to provide a truly sustainable income and capital growth solution for the long term…
02 Nov 2022 The stability dividend
Our analysis shows that trusts paying a regular income suffer less discount volatility...
25 Mar 2022 Slides and Audio: Troy Income & Growth
Download the presentation and listen to the audio from our 'Ideas for your ISA' virtual Spring event on 15 March...
23 Mar 2022 Fifteen ideas for your ISA
Slides and audio from our event last week, featuring fund managers running money in every major market in the world...
09 Feb 2022 The dividend dilemma
We examine the trade-off between earning a current high dividend yield and growing future dividends...
15 Dec 2021 Dividends in the time of corona
Investment trusts have proven their worth during the pandemic, delivering dividend growth despite the turmoil…
09 Nov 2021 Fund Analysis
TIGT’s managers’ commitment to quality remains unwavering in a changing UK market…
29 Sep 2021 Slings and arrows
Our analysts argue over whether it’s better to take arms against volatility in a portfolio, or to simply suffer it…
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
25 Nov 2020 Results analysis: Troy Income & Growth
We look at how TIGT has protected capital throughout the uncertainty of 2020, and how it can be a useful addition to income hungry investors’ portfolios…
24 Sep 2020 Fund Analysis
Seeking to identify and invest in a portfolio of high quality companies, TIGT seeks to generate sustainable dividends and income and capital growth...
06 Aug 2020 Recipe for disaster?
In this article, we assess whether the recent shift to concentrated portfolios has been beneficial or detrimental during corrections…
15 Jul 2020 Why stagflation is likely and how to protect your portfolio from it
Our analysis suggests a combination of cost-push inflation and economic hardship could lead to a short, but unpleasant, period of stagflation...
29 Apr 2020 On solid ground
Our analysis of discounts highlights trusts which are likely to offer significantly less discount downside from the current level…
15 Apr 2020 Hold fast
Investment trusts' revenue reserves could make them a vital stronghold for investors facing UK dividend cuts of as much as 47%....
07 Jan 2020 Fund Analysis
Seeking to identify and invest in a portfolio of high quality companies, TIGT seeks to generate sustainable dividends and income and capital growth...
06 Sep 2017 Fund Analysis
A concentrated UK income trust focused on delivering capital and dividend growth run via a conservative approach...
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