Investment trusts are generally considered to be more volatile than unit trusts but for the cautious investor, Personal Assets Trust could be seen as the exception to the rule.
On an annual basis the trust has provided tremendous downside protection, experiencing both net asset value (NAV) and share price falls much smaller than many open-ended funds' total returns. In 2008, for example, the trust's share price only fell 3.2 per cent in contrast to falls of more than 30 per cent for the average global growth investment trust and the FTSE All Share, and nearly 16 per cent for the average open-ended Cautious Managed fund.
The downside to Personal Assets Trust's caution is that it can lag its peers and the market when the latter is rising. But its limitation of downside means that its NAV cumulative returns beat its sector average and those of many of its peers. However, the strong performance has not escaped investors' notice, and the trust usually trades at a small premium to NAV.
This is not surprising: Troy Asset Management, the company that has run Personal Assets Trust since 2009, aims to generate absolute returns for investors over the long-term. The company was set up to preserve the assets of a wealthy family (the Weinstocks, of GEC fame) and the preservation ethos endures. Troy says: "Our first principle is that those who have money should concentrate on not losing it."
Troy measures its assets against cash rather than relative returns and avoids investments its managers do not like or understand. Assets tend to be held for the long term, with a preference for high-quality companies with attractive valuations, while the downside of an investment is also carefully examined.
To find out more about the investment approach, read our recent interview with Personal Assets' manager Sebastian Lyon.
PERSONAL ASSETS TRUST (PNL) | |||
|---|---|---|---|
| PRICE | £319 | NAV | £314.17 |
| MARKET CAP | £322.6m | PRICE PREMIUM TO NAV | 0.79% |
| No OF HOLDINGS: | 24* | 6 MTH NAV PERFORMANCE | 3.16% |
| SET UP DATE | 22-Jul-83 | 1 YEAR NAV PERFORMANCE | 12.37% |
| MANAGER START DATE | 03-Mar-09 | 3 YEAR NAV PERFORMANCE | 32.95% |
| TOTAL EXPENSE RATIO | 1.05% | GEARING | 100% |
| YIELD | 1.68% | MORE DETAILS | www.taml.co.uk |
Source: Investors Chronicle, *Troy Asset Management.
Performance data as at 21 June 2011.
TOP TEN HOLDINGS as at 31 May 2011
| Holding | Percentage |
|---|---|
| US TIPS 1.375% 2018 | 20.70% |
| Gold Bullion | 13.50% |
| British American Tobacco | 5.30% |
| Nestle | 4.60% |
| Coca Cola | 4.10% |
| Singapore 0% T-Bill 2011 | 4% |
| Diageo | 3.20% |
| Philip Morris | 3.20% |
| GlaxoSmithkline | 3.10% |
| Tesco | 3% |
Asset allocation
| Asset allocation | Percentage |
|---|---|
| UK equity | 26% |
| US equity | 20.50% |
| European equity | 4.60% |
| Australian equity | 2.60% |
| Gold bullion | 13.50% |
| Liquidity and assets | 32.80% |
