The portfolio now has the flexibility to hold whatever it wants in the equity market, which FE Alpha Manager Lyon believes will give it an advantage over its mixed-asset rivals in both the short and long term.
"Moving the Trojan fund into the IMA Flexible Investment sector gives us greater scope," he said. "The 40-85% Shares sector limits restricted flexibility to protect downside. Moreover, in the long term we intend to be fully invested in equities. The 85 per cent limit would have constrained us from being more positively positioned."
The fund currently has 33.8 per cent invested in the equity market, meaning that it does not adhere to the Mixed Investment 40-85% Shares sector's guidelines. Both Lyon and fellow FE Alpha Manager Francis Brooke, who heads up the Trojan Income fund, are defensively positioned in their funds; however, Brooke recently said in an interview with FE Trustnet that there is likely to be a compelling buying opportunity in the equity market in the near future.
In spite of moving into a far riskier IMA sector, the portfolio is still among the best performers in the short, medium and long term. According to FE data, the Neptune Global Alpha fund is the only portfolio in the Flexible Investment sector that has outperformed it over 10 years, albeit with significantly more volatility. Trojan is also a top-decile perfomer over three- and five-year periods, and easily tops the sector over one year, with returns of 10.14 per cent.
Performance of fund vs sector over 10-yrs
Source: FE Analytics
Troy’s Trojan Capital fund, managed by Gabrielle Boyle, is also set to move sectors – from IMA Flexible Investment to the IMA Global sector, where funds have at least 80 per cent of their assets invested globally in equities, diversified by geographic region.
"The move of the Trojan Capital fund into the Global sector better reflects the more global approach taken by Gabrielle and capitalises on her experience as a global and international equity fund manager," explained Lyon, who is also chief executive of the group.