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 (TIGT) takes a conservative, benchmark-agnostic approach to investing in predominantly UK equities, aiming to provide investors with a consistent return profile with a core focus on capital preservation and downside protection over the very long term. The managers target high-quality, dividend-paying companies that they believe currently provide or will provide investors with both capital growth and income.

As the chairman of the trust’s board puts it, the shift in the investment strategy and rebasing of the Dividend since 2020 have “sharpened the focus on quality and sustainable dividend growth”. The emphasis is on finding high-quality and fundamentally sustainable companies that may offer a lower dividend yield in the short term but have a greater chance of providing investors with dividend growth over the decades to come. As we discuss under Portfolio, this is reflected in the trust’s differentiated sector allocations when compared to the FTSE All Share. This has led to disappointing performance in the short term, primarily through a lack of exposure to energy companies, which the managers believe are in structural decline. Additionally, TIGT has a greater exposure to growthier sectors that have witnessed a pullback from lofty valuations, along with the discounting effect that comes with progressively rising interest rates.

TIGT has a discount control mechanism designed to keep the shares trading close to NAV, and as performance has suffered over the past 12 months this has been utilised extensively. The discount at the time of writing is 1.9%, close to the one-year average of 1.6%.

TIGT has been ungeared for many years but has recently arranged a new gearing facility which the managers are utilising to facilitate the current 3% level of gearing.

Analyst's View

We think managers Hugo Ure and Blake Hutchins’s long-term focus could appeal to investors seeking a sustainable dividend who are committing capital for the long term. The benchmark-agnostic nature of TIGT provides the managers with the freedom to construct a portfolio aligned to their long-term objectives, away from the confines of any specific benchmark index. This flexible approach led the managers and board to make a strategic shift in 2020, with the aim of enhancing the sustainability of dividend and capital growth over the long term. In doing so current income levels have been compressed, which could prove off-putting for investors requiring an immediate higher level of income.

The lack of energy exposure is the key driver of recent underperformance. Whatever the short-term dynamics, we think it is likely the sector will continue to face headwinds in the light of net-zero commitments. As such we think TIGT’s strategy could appeal to investors with strong ESG convictions or who are wary of the long-term future for capital or income returns in the sector.

In June, the board arranged a new Gearing facility after many years of not using gearing. We believe this should not unsettle more risk-averse investors since the managers are expected to remain conservative in their approach – as demonstrated by the current 3% gearing level. Any further gearing is expected to remain below 10% and to only be utilised if the managers see genuine opportunities to enhance returns ahead of the cost of using the facility.


  • Long-term, quality-focussed rebasing of the dividend is likely to improve the sustainability of future capital and income growth
  • Discount control mechanism helps minimise discount volatility and maintain high levels of shareholder liquidity
  • Benchmark-agnostic investment approach, focussed on providing investors with capital preservation and low-volatility returns


  • Low current dividend yield versus peers
  • Underperformance in cyclical-focussed ‘value’ market rallies may be prolonged as geopolitical tensions and interest rate hikes remain likely to persist in the near term
  • Although conservative, the introduction of a new gearing facility may increase volatility and exaggerate downside returns
Continue to Portfolio

Fund History

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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
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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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