Personal Assets (PNL)

Personal Assets Trust (PNL) offers investors an unconstrained, multi-asset investment solution focussed on the preservation of its shareholders’ capital whilst aiming to increase its value over the long term – in that order. As we discuss in Portfolio, PNL’s longstanding manager Sebastian Lyon, who is also the CIO and founder of Troy Asset Management, takes an absolute return mindset that is free from the constraints of any benchmark. Although unconstrained, the strategy typically uses a relatively narrow and uncomplicated range of assets including listed equities, bonds, gold, and currency, unlike some other strategies found within the flexible investment trust sector. However, the allocation to each asset class can vary considerably, particularly with respect to equities which at its current level is 24% of the portfolio. This reflects Sebastian’s cautious attitudes to risk and the limited availability of high-quality, attractively-valued, and fundamentally sustainable investment opportunities currently in the market.

As we discuss in Performance, Sebastian’s focus on capital preservation leads to a cautious approach to asset allocation. Combined with the flexibility of the strategy, this has resulted in one of the most consistently strong long-term risk-adjusted performance characteristics in the AIC investment trust universe. The trust has shown a valuable protective capacity during the periods of market turbulence we have seen over the past five years, with the significant allocation to defensive assets such as inflation-linked bonds, US and UK short-dated government bonds, gold, and cash.

PNL’s discount control mechanism is designed to minimise discount volatility to maintain shareholder value and liquidity by keeping shares trading close to NAV over the long term. At the time of writing, PNL is trading at a discount of 1% (see Discount).