Troy Trojan Income - different classes

Ben_Fogles_Dog

Can anyody tell me what the different classes indicate for the Trojan income fund, there are X, O and I available, as far as I can tell the only obvious difference I can find is that the I fund has a 1.5% annual charge compared to 1.0% for the O and X classes, I can't find any withdrawal charges. Is the I class simply a means for HL users to be charged more?

Aegis

The extra 0.5% is for trail commission to advisers. HL take a proportion of this fee, although they don't provide any advice.

Ark_Welder

Not 'X' shares, but 'S', which are availabe only to registered charities (with a lower AMC).

Ben_Fogles_Dog

Thanks, is there an easy way of seeing the differences? Companies seem to be loathe to advertise them clearly.

dunstonh

Ben_Fogles_Dog wrote: »

Thanks, is there an easy way of seeing the differences? Companies seem to be loathe to advertise them clearly.

It is clearly published in the fund documentation. Your investment platform will clearly publish the terms of the version they offer as well.

I dont see why companies should advertise them. Adverts are promotional. They are not for showing all the nuts and bolts. You should never rely on advertising as a source of research. They are published though in the correct places and clearly shown.

For example, here is the clearly published terms for the Trojan funds.
http://www.taml.co.uk/our-charges/our-charges

They also clearly state them on the fund factsheet.
http://www.taml.co.uk/archive-reports/fact-sheets

Third party data suppliers, such as morningstar and financial express/trustnet also clearly display the information.

Rollinghome

Ben_Fogles_Dog wrote: »

Thanks, is there an easy way of seeing the differences? Companies seem to be loathe to advertise them clearly.

Unfortunately it's just a case of buyer beware and reading the documentation including the prospectus carefully. As you've realised, paying an extra 0.5% each year when compounded makes a big difference over the years.

Until May 2011 you could have undercut Hargreaves Lansdown by buying the Trojan O class directly from the Troy ACD with a minimum investment of just £1000 and no initial charge.

But in May, Troy suddenly decided to increase the minimum investment to £250,000 and impose an initial charge of 5%. It was no longer so easy to undercut HL (though existing direct investors were unaffected). At about the same time HL, having ignored the fund for years, gave their higher charging version their Wealth 150 gold star and started regularly recommending it in their junk-mail. A pure coincidence or more likely a deal done between the two?

At the moment from a typical unit trust AMC of 1.5% pa, 0.5% or so goes every year as sales commission to the financial adviser or HL and a further 0.25% or so goes as a platform fee to the 'wholesaler' - which HL also take. There can also be more back-handers for undisclosed marketing arrangements.

Fortunately, the FSA wants all those murky arrangements to go by the end of this year. Surveys found that the vast majority of consumers were unaware of what was happening.

The intention is that under RDR the fund managers won't be able to pay advisers or HL commission or special fees to sell their funds. Instead advisers etc will have to charge the consumer directly for their services so that what's being paid and to whom is transparent. The fine details are still to be negotiated between the FSA and the industry. Roll on 2013.

You might also want to consider the Personal Assets investment trust which is also run by Sebastian Lyon in much the same way as Trojan. Being an IT it pays no commission to advisers but does have the usual dealing costs. All classes of Troy Trojan are subject to a 0.5% dilution levy on both purchases and sales.

gadgetmind

I know it's not the income variant, but you can buy the Personal Assets Trust IT with a lower TER and no premium/discount issues.

Of course, HL will charge 0.5%pa for holding this in an ISA, but III won't.

Ark_Welder

The investment trust equivalent to Trojan Income fund would be closer to Troy Income & Growth Trust plc rather than PNL: the manager is the same and the income mandate is similar, the main portfolio difference being that the OEIC (currently) holds more overseas companies.

Unless the OP meant the income shares of the Trojan fund?

Rollinghome wrote: »

But in May, Troy suddenly decided to increase the minimum investment to £250,000 and impose an initial charge of 5%.

A few years ago, Troy suddenly decided to reduce the minimum initial investment level for direct holdings from £10,000 to £1,000 (or from £7,000 for ISA holdings).

gadgetmind

Ark_Welder wrote: »

The investment trust equivalent to Trojan Income fund would be closer to Troy Income & Growth Trust plc rather than PNL

Thanks, I'd forgotten about that one as I tend to buy most income-generating assets directly rather than relying on funds/ITs.

Rollinghome

Ark_Welder wrote: »

Unless the OP meant the income shares of the Trojan fund?

You're probably right that he does mean the Troy Trojan Income (Income) run by Francis Brooke rather than the much bigger Troy Trojan (Income) run by Sebastian Lyon as I assumed. A tad more imagination from them with the names would help.

Ark_Welder wrote: »

A few years ago, Troy suddenly decided to reduce the minimum initial investment level for direct holdings from £10,000 to £1,000 (or from £7,000 for ISA holdings).

The sudden hike for the Trojan to a £250k min for the O class at the same time as HL started their heavy promoting of the fund and new inclusion in the 150 list seems unlikely to be a coincidence. If the intention had been to reduce inflows and limit the fund size it wasn't the obvious way to achieve it. But I doubt either party will fess up.