Troy Trojan enters RedZone list as bearish stance backfires

Troy Trojan enters RedZone list as bearish stance backfires

Former star fund Troy Trojan has been named as one of the worst performers by the Chelsea Financial Services’ list of lacklustre funds.

The £2.6bn fund has entered the Chelsea RedZone by cumulatively underperforming the sector average by 23.8 per cent in the three years to May 1.

However, since its launch in 2001 it has returned 183.9 per cent, according to the fund’s factsheet, more than double the 82 per cent rise experienced by the IMA Flexible Investment Sector.

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“The biggest disappointment for me…was the new entrant at number 10, Troy Trojan,” said Chelsea’s managing director Darius McDermott.

“The manager, Sebastian Lyon, has been extremely bearish in recent years and currently has around 20 per cent in cash and 10 per cent in gold bullion, which has really hurt the fund.”

However, he added the fund was positioned to cushion investors in the event of a ‘slump’ in markets.

“I wouldn’t write the fund off just yet – the manager has an outstanding long-term record and may yet be proved right – but it’s one to monitor closely.”

Funds managed by First State, M&G, Aberdeen and Newton also had the dubious honour of entering the DropZone section of the list, by underperforming their sector averages by the largest amount over the cumulative three-year period.

There are 143 funds in Chelsea’s RedZone, which measures all funds that have underperformed their sector in each of the past three years, with total assets of almost £48.5bn.

More than 55 per cent of these assets are in the UK All Companies sector and within that almost £20bn of those are in passive funds.

Mr McDermott pointed out these underperforming passive funds comprised 22 per cent of the 116 trackers available to UK investors, five of which are managed by State Street Global Advisers.