Fund of the week: Play safe with a defensive stock picker

Keeping your savings safe is a challenge. Shares worldwide have suffered a torrid August. Worse still, autumn, a typically volatile period, lies ahead. With a return to recession looming for America, a fund that looks to protect your cash rather than taking major risks looks like the right bet.

A good example is the Troy CF Trojan Fund, which focuses on sheltering capital, says Mark Dampier at Hargreaves Lansdown. That means it has a naturally defensive stance, something we've favoured for some while. Manager Sebastian Lyon invests in equities, bonds, commodities and cash. As the fund's investments are spread across a range of assets, its performance returns have a low correlation to global equity markets.

Since the fund's launch just over ten years ago, "returns have been exceptional", says Dampier. "While our analysis suggests asset allocation" ie, being in the right markets at the right time "has been key, Sebastian Lyon's stock picking also stands out as among the best of more than 1,300 funds we analyse."

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This is a unit trust, which means that the total expense ratio at 1.54% is higher than we generally like. But the fund's philosophy looks sound. "We're long-term investors, buying on weakness rather than selling on strength," says Lyon.

His current holdings include inflation-linked bonds and international companies with strong brands and good cash flows. For now he's steering clear of miners, banks, cyclicals, property and corporate bonds. Furthermore, 20% of the fund is in gold and gold shares, as Lyon "can't see gold going down very far".

Contact: 0845-608 0950.

Troy CF TrojanFund top ten holdings