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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Trojan Fund from Troy Asset Management 2024 Q3 Investor Letter | Buyside Digest

Back to Fund Profile (Trojan Fund from Troy Asset Management)

Primary Source Intelligence • Q3 2024 Letter Analysis

Trojan Fund from Troy Asset Management Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Trojan Fund from Troy Asset Management. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

Annualized+6.6%

Digest Analysis

Quick Take

"Troy maintains defensive positioning amid unsustainable US fiscal deficits, election uncertainty, and record equity valuations. The multi-asset strategy holds 29% quality equities, 32% inflation-linked bonds, and 13% gold as insurance."

Executive Summary

Troy Asset Management maintains a cautious stance in their Multi-Asset Strategy amid multiple macro headwinds. The core thesis centers on capital preservation through simplicity, avoiding complex financial engineering while holding quality equity positions alongside inflation-protected bonds and gold. Key concerns include the unsustainable US fiscal deficit at 7% of GDP, potential election uncertainty, and elevated equity valuations near record highs. The manager expects continued pressure on government bond yields as Treasury supply increases, requiring higher compensation for duration risk. Private markets face a liquidity squeeze with limited exit opportunities, potentially forcing institutional investors to sell liquid assets. Interest rate cuts have been far fewer than expected, with only one Federal Reserve cut versus seven anticipated. Gold continues to perform as central banks accumulate reserves amid fiscal concerns. The portfolio maintains 29% equities focused on quality names like Unilever, Visa, and Microsoft, 32% inflation-linked bonds, 13% gold-related investments, and 20% short-dated government securities. The strategy emphasizes buying during weakness and reducing risk during market euphoria.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

68%

CautiousHigh

Moderate (68%)

Manager demonstrates moderate-high conviction through specific position sizing (naming 8 holdings with exact percentages), clear asset allocation targets, and definitive statements about strategy. The 80% hit rate since 2001 and specific portfolio construction decisions show conviction, though the diversified nature across asset classes moderates the score.

Growth Outlook

30%

BearishBullish

Bearish (30%)

The manager expresses significant concerns about record high equity valuations, unsustainable fiscal deficits, election uncertainty, and multiple geopolitical risks. Language includes warnings about 'sea of geopolitical and policy risks' and expectations that markets would 'loathe' election uncertainty.

Risk Appetite

35%

DefensiveAggressive

Defensive (35%)

Portfolio is positioned defensively with only 29% equities, significant allocations to bonds and gold as insurance. Manager states they 'continue to be cautious with the equity weight' and maintains gold as 'essential portfolio insurance' at 12% allocation.

Capital Deployment

43%

De-riskingDeploying

Net Neutral (43%)

Manager has 'reduced gold holdings modestly since the summer' and maintains cautious equity positioning. No evidence of significant new deployment, with emphasis on maintaining defensive allocations. The reduction in gold suggests minor de-risking activity.

Forward Guidance

38%

CautiousExpansionary

Neutral (38%)

Manager explicitly states they are 'not holding our breath' for equity rallies and continue cautious positioning. The guidance emphasizes patience and defensive positioning rather than active deployment into risk assets.

Language Signal

33%

BearishBullish

Bearish (33%)

Language is dominated by risk-focused terms including 'unsustainable,' 'out of control,' 'loathe,' 'threat,' 'squeeze,' and multiple warnings about fiscal and market risks. Bullish language is limited to specific asset classes like gold.

Perceived Risk

75%

Low RiskElevated

Elevated Risk (75%)

Manager identifies multiple specific systemic risks including unsustainable fiscal deficits, potential election disputes, private market liquidity squeeze, and elevated valuations. Detailed discussion of potential yield curve control and financial repression scenarios demonstrates high perceived risk.

Opportunity Density

35%

ScarceAbundant

Selective (35%)

Manager sees limited opportunities with 'modest' prospective returns from equities and emphasis on patience. Warren Buffett's increased liquidity is cited approvingly, suggesting scarce attractive opportunities in current environment.

Time Horizon

72%

Short-TermLong-Term

Decade+ (72%)

Manager emphasizes long-term capital preservation with 23-year track record analysis and explicit focus on avoiding 'unforced errors.' Strategy is designed for long-term wealth preservation rather than short-term gains, with patient approach to market cycles.