Capital preservation investment trust Personal Assets (PNL), whose mandate is ‘to protect and increase (in that order) the value of shareholders' funds per share over the long term’, did just that in the first half to the end of October with an increase in net asset value (NAV) of 2.9% compared with a loss of 3.4% for the FTSE All-Share index.
This follows a strong year to the end of April when the trust grew its NAV by 5.3% while the All-Share index collapsed by almost 20%.
The outperformance was largely due to the trust’s high weighting in assets other than equities, including US Treasury Inflation Protected Securities (TIPS) which make up 30% of NAV and UK gilts which make up another 12.6%. Altogether, cash and short-term assets accounted for roughly 58% of assets during the half.
Manager Sebastian Lyon of Troy Asset Management, who has run the trust for over a decade, described his portfolio activity during the period as ‘modest’ despite the wild gyrations in stock markets.
Coca-Cola, a holding since 2009, was sold ‘due to what we believed to be persistent headwinds to volume growth over the long term’ on top of ‘the more immediate threat to its cash flows from Coke's out-of-home consumption’ due to repeated lockdowns of the hospitality sector. The trust also sold its residual holding in Irn-Bru maker AG Barr (BAG).
Weightings in top 10 holdings American Express and Visa were increased as Lyon sees more businesses digitising payments between themselves as well as a rise in consumer spending as economies begin to reopen.
| Stock | Sector | Weighting |
| Microsoft | Technology | 5.2% |
| Alphabet | Technology | 4.1% |
| Unilever | Food Producer | 3.7% |
| Nestle | Food Producer | 3.7% |
| Philip Morris | Tobacco | 2.8% |
| Visa | Financial Services | 2.8% |
| Diageo | Beverages | 2.5% |
| Medtronic | Healthcare | 2.4% |
| American Express | Financial Services | 2.1% |
| British American Tobacco | Tobacco | 2.1% |
| Top 10 Holdings | 31.4% | |
| Total Equity Holdings | 42.2% |
A new position was opened in US medical device supplier Becton Dickinson, which has ‘a wonderfully diversified portfolio of small-ticket, repeat purchase items that are indispensable to healthcare globally’. The shares were acquired ‘at an attractive valuation following a prolonged period of dull performance’.
As well as the firm’s strong competitive position and the increasing demand for medical devices in both developed markets with aging populations and developing markets, where the provision of healthcare is becoming more sophisticated, Lyon backs the new chief executive’s drive ‘to bring digital capabilities to bear on Becton's portfolio’.
