Investment trust Personal Assets is a safe port in a storm. Its mission is to protect shareholders from the full brunt of falling stock markets – while providing them with long-term positive returns.
It’s a goal the trust’s manager, Troy Asset Management, has fulfilled since taking the helm in March 2009. Average annual returns of 7 per cent are testimony to the skill of Troy in living up to its investment billing.
Just as importantly, it has done this while ensuring shareholders have had a relatively smooth journey. When stock markets fall, the trust’s share price drops less. The price for this ‘protection’ is inferior returns when equities perform strongly.
For example, in 2020 when the world went into lockdown in response to Covid, the trust’s share price dropped by 11.9 per cent before recovering – much less than the corresponding 35.3 per cent correction in the FTSE All-Share Index.
Personal Assets, valued at £1.7billion, has shown its resilience (again) in recent weeks as stock markets have wobbled in response to the conflict in the Middle East – and oil supplies being compromised by Iran’s control of the Strait of Hormuz.
Last month, the trust’s shares fell by 4 per cent compared to a 6.7 per cent drop in the FTSE All-Share Index.
So far this month, the shares are up 2 per cent, meaning the price is about back to where it was at the start of the year.
Not that Charlotte Yonge, the trust’s senior investment manager, is content. ‘March’s performance numbers were disappointing,’ she says, attributing them in large part to the fall in the gold price.
The trust holds 10 per cent of its assets in gold, with the rest of the portfolio invested in a mix of equities, short-dated UK gilts, Japanese bonds and inflation-linked government bonds (both US and UK).
Although the trust trimmed its gold holdings earlier this year by a third, Yonge is still bullish about the precious metal’s long-term prospects on the back of strong demand from Asian economies, inflationary fears stoked by the Middle East conflict and a desire by many countries to reduce their dependency on the dollar. ‘At the margin, some countries such as Turkey may be selling gold,’ says Yonge, ‘but this doesn’t undermine the case for gold exposure.’
Equities, spread across 18 holdings, account for a third of the fund’s assets. Defensiveness is the order of the day.
So, while Alphabet, parent company of Google, represents the trust’s third largest equity position, Yonge says it has been taking profits. ‘We added to our position in Alphabet this time last year when the share price was around $145,’ she says.
‘It now stands just short of $340. If we had not chipped away at the holding, it would now account for 6 per cent of the portfolio.’
Like many market experts, Yonge questions the sustainability of the artificial intelligence investment theme of which Alphabet is a part.
She prefers instead companies such as drinks giant Heineken whose stock market valuation stands at a near 15-year low. ‘The stock has done little since we bought it in 2023,’ she says, ‘but it provides a margin of safety in a consumer sector that is defensive.’
The fund’s annual charges are 0.67 per cent and the shares stand at a small premium to the value of the assets – in part, a reflection of the trust’s appeal to investors seeking safer havens.
The market ticker is PNL and identification code BM8B5H0. Although it pays quarterly dividends, it is only equivalent to an annual yield of 1 per cent.
DIY INVESTING PLATFORMS
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.