Despite the Bank of England’s protestations, inflation is clearly a problem in Britain – at least for now. In a high-inflation environment, income funds “look all the more attractive”, says Trustnet.com. Troy Asset Management’s Trojan Income Fund is one of the sector’s best, having returned 40% over the past five years, compared to an average of 17%.
Fund manager Francis Brooke has 25 years’ experience in the investment world and believes we are entering a good period for dividend growth. “I would expect the opportunities for dividend growth to be much better than they have been in the past two or three years and I think that will be a great advantage for equity income investors,” he says in The Daily Telegraph.
“Dividend cover in the market is much higher than it was two or three years ago. So the capacity that companies have to grow dividends is greater.” Brooke has managed the fund since its launch six years ago and over that period he has managed an unbroken record of rising payments.
As well as dividend growth, Brooke is also hunting for companies that look likely to offer capital growth. The fund aims to maintain above-average income payments and medium-term capital growth. So, alongside dividend-paying FTSE 100 stalwarts such as pharma giants GlaxoSmithKline and AstraZeneca, it also invests in less-well-known firms, including Lancashire, a Lloyd’s underwriter, which has produced a total return of more than 150% since it was introduced to the portfolio three years ago.
Contact: 020-7491 4030.
Trojan Income Fund top ten holdings
| Name of holding | % of assets |
|---|---|
| Royal Dutch Shell B | 4.0 |
| GlaxoSmithKline | 4.0 |
| Unilever | 3.8 |
| Vodafone Group | 3.6 |
| Imperial Tobacco Group | 3.3 |
| British American Tobacco | 3.0 |
| BP | 2.8 |
| Pennon Group | 2.7 |
| Experian | 2.6 |
| Centrica | 2.6 |