The Troy Trojan fund has adopted a distinctly defensive stance on the global economy in recent years, with the largest investment in the fund being over £200m in gold bullion exchange traded funds..
The largest equity investments include consumer staple stocks such as British American Tobacco and Phillip Morris.
The defensive stance has hurt performance in recent times. The fund is the second worst performer in the IA Flexible Investment sector over the past five years, and among the bottom 25 per cent of funds in the sector over one and three years.
But Mr Lyon has said he is sticking to his guns, arguing "patience in investing means shunning middling ideas".
"The companies that exhibit repeat revenues, generated from goods or services that customers purchase regularly out of habit, loyalty or necessity have rarely been more expensive since the fund was launched," he admitted.
"There is therefore the temptation to move down the quality ladder and plunge into the pit of companies that have not demonstrated a consistent ability to generate high returns on capital.
"We continue to eschew such enticements, as even mediocre companies look expensive, and we remain will be more interesting and rewarding than those available today.”
Simon Gergel, who runs the £698m Merchants Investment Trust, said investors noted better than expected economic data in September, and moved out of UK defensive shares and towards those that benefit from stronger sterling and higher UK interest rates.
Higher interest rates are considered by many in the market as being bad for the large defensive stocks because those businesses have earnings that are viewed as being almost as safe as the yield on a bond.
If interest rates rise, that would be expected to lead to higher bond yields and so increase the attractiveness of bonds relative to defensive equities.
But Mr Lyon said he expects the high yield bond market to be where the impact of higher interest rates is felt, as in his view, investors in that part of the market are ignoring fundamental analysis of the credit worthiness of companies and simply chasing yield.
Adrian Frost, who runs the £6.3bn Artemis Income fund, said he does not expect a trend of managers abandoning FTSE 100 defensive stocks, as any interest rate increases will be modest in nature.
He said sentiment from overseas investors remains negative and this will limit the extent to which the less defensive sectors can outperform.
Mr Frost said: “From the perspective of the all-important international investor, the UK market is about as popular as a North Korean tourist brochure. This is not surprising given uncertainty about the plan for Brexit.
"Jeremy Corbyn's strategy, meanwhile, may be clearer – but the market doesn't much like it.
"The stockmarket, however, knows a lot of this and we can't help feeling that any incremental improvements to the situation will act like embers on brushwood. Asset allocators will, simultaneously, want to increase their allocation to UK equities and the market will go up – that's how it works.”
Philip Milton, who runs Philip Milton and Co, an adviser firm in Devon, said: "The small and midcap sectors have had a great run already….. and to some extent a number of bigger companies which have wobbled or not participated in the gains offer attractive fundamental value too.
"Companies like Capita, Pearson, Glaxo and so on are pretty good value so it is wrong to label them all as being over-priced."
David.Thorpe@ft.com
