Troy Income & Growth Trust (TIGT) invests predominantly in UK equities. Managed by Francis Brooke and Hugo Ure of Troy Asset Management, the trust reflects Troy’s emphasis on capital preservation over the cycle, and owns a highly liquid portfolio of between 35-50 stocks matching Troy’s preferred investment characteristics.
Whilst income generation is a goal of the trust, the managers of TIGT also seek to ensure this income is growing in real (inflation-adjusted) terms and is accompanied by capital growth as discussed in the ‘Dividend’ section. Revenue reserves should help support the dividend in the near future.
Within TIGT the focus is very much on bottom-up stock selection and seeking ‘quality’ companies, though they are cognisant of the wider market and economic dynamics. Whilst they prefer companies which exhibit non-cyclical characteristics with low capital intensity, they can be pragmatic in certain instances where only one of these criteria is met.
NAV and share price volatility have typically been below that of the wider market. The latter is partially a function of the discount control mechanism (DCM) intended to improve liquidity and ensure the trust trades near to NAV with relatively low discount volatility detailed in the ‘Discount’ section. In recent years this has generally led to net share issuance, helping to grow assets within TIGT without adversely diluting existing shareholders.
Troy recently celebrated the 10th anniversary of managing the trust, and over this period returns from TIGT have substantially outstripped those of the FTSE All Share Index. This has been achieved without the use of gearing. Recent returns have remained strong, with TIGT outperforming the index, having largely kept pace in rising markets whilst exhibiting lower drawdowns than the wider market.