Fund Profile

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Disclosure – Independent Investment Research

This is independent research issued by Kepler Partners LLP. The analyst who has prepared this research is not aware of Kepler Partners LLP having a relationship with the company covered in this research report and/or a conflict of interest which is likely to impair the objectivity of the research and this report should accordingly be viewed as independent.

Overview
PHI looks for growth in all its forms in an underappreciated region...
Overview

Pacific Horizon (LON:PHI) invests across Asia (excluding Japan), looking for the best growth companies the region has to offer. However, these can be very different to the growth companies held by other Baillie Gifford strategies and other growth-orientated peers. Portfolio manager Roderick Snell looks for growth wherever it comes, including investing in areas such as materials and energy if he can see a sustained growth story (see Portfolio).

Roderick has recently taken on full management responsibilities following the departure of Ewan Markson-Brown. Roderick had been Ewan’s deputy manager throughout his tenure and has been co-managing similar open-ended mandates across Baillie Gifford (see Management).

Asia has been a tough place to invest in over the past year due to a number of factors, but Roderick believes that on a macro level the region is much better placed than developed markets are. He highlights lower government debt levels and more manageable inflation as two key features. He also reiterates that the key growth drivers of Asia remain intact, especially the growing middle classes which he believes will continue to push the region forward. He believes that these financial conditions and growth outlook can be accessed through compelling company valuations, largely due to the negative sentiment around the region (see Performance).

Having been regularly more expensive than its peers, and even trading on a premium for large parts of the past five years, PHI has now fallen to a Discount which is broadly in line with the sector average.

Analyst's View

We believe PHI offers a growth portfolio that is distinct from those of its peers due to manager Roderick Snell’s approach of looking for growth in all its forms, not just in the standard industry sectors. This is best demonstrated by the large current weighting in basic materials, made in order to capture the potential growth in electric vehicles (see Portfolio). As such, we believe the trust offers investors a portfolio with the potential to outperform the benchmark in a range of environments, as shown by the strong performance from 2020 to 2022.

More recently the trust has come under pressure as the market has swung away from growth companies, while it has also been impacted by concerns over an economic slowdown (see Performance). This has driven valuations down to levels last seen during the financial crisis, which Roderick argues is an excessive reaction that could be seen as a particularly attractive entry point for long-term investors.

Furthermore, PHI has moved to a Discount that is close to that of the sector average. The trust has historically had a volatile discount and even traded at a premium as recently as April 2022. This could be seen as a further potential source of returns for investors.

Bull

  • Outstanding long-term performance
  • Index-agnostic approach which allows for considerable outperformance of comparators
  • Will hold growing companies regardless of their industry, which provides a wider growth offering

Bear

  • Underperformance could continue if growth investing remains under pressure
  • Change of management could have an impact on performance
  • Trust suffers from high discount volatility
Continue to Portfolio
2024 Kepler Growth Rated Fund

This trust has been awarded a rating by Kepler Trust Intelligence for growth... Find out more

Fund History

17 Jan 2024 Top of the Pops
We reveal the winners of our investment trust ratings for 2024…
15 Dec 2023 Pacific Horizon Investment Trust: Manager Insights
Baillie Gifford investment manager Roderick Snell discusses why, despite recent performance struggles due to inflation, interest rates and geopolitical tensions, he believes the long-term outlook for investing in Asia remains promising...
22 Sep 2023 Opportunities in Asia ex Japan
In this webinar recording, Roderick Snell, manager of the Pacific Horizon Investment Trust, discusses why he believes Asia ex Japan will be one of the fastest growing regions over the coming decades and how he strives to be invested in its fastest growing companies...
23 Jun 2023 Pacific Horizon: The Indonesian companies powering the green transition
Indonesian companies were Pacific Horizon’s best performers in 2022. Roderick Snell, manager of Pacific Horizon Investment Trust, shares why the country is positioned well for long-term growth...
18 Jan 2023 Fund Analysis
PHI looks for growth in all its forms in an underappreciated region...
11 Jan 2023 Solving the Rubik’s Cube
We reveal the winners of our investment trust ratings for 2023…
09 Dec 2022 Pacific Horizon Investment Trust – Manager Insights
Roderick Snell, manager of the Pacific Horizon Investment Trust, gives an update on the portfolio and the outlook for Asian companies against the current economic backdrop...
28 Oct 2022 Pacific Horizon Investment Trust PLC: opportunities and challenges
In this webinar, Roderick Snell, manager of Pacific Horizon Investment Trust PLC discusses how the trust seeks out the fastest growing companies in the most rapidly growing and populous region of the world...
26 Nov 2021 Pacific Horizon Investment Trust PLC - Manager Insights
Roderick Snell, investment manager of the Pacific Horizon Investment Trust PLC, gives an update on the portfolio, discusses post-pandemic trends, and tells us what excites him most about the future of the region...
14 Jul 2021 Grade inflation
We look at how our discounted opportunities portfolio has done in the first half of the year and update on the performance of our long-term rated funds…
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
08 Apr 2020 Fund Analysis
PHI is a long-term outperformer looking cheap after big NAV falls…
17 May 2018 Blast off!
As China A-Shares join the global indices, many investors remain structurally underexposed to this exciting region...
17 May 2018 Fund Analysis
A highly active portfolio of Asian equities selected for their long-term growth potential..
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