Interim Management Statement

RNS Number : 7490O

Personal Assets Trust PLC

12 March 2009

 



Personal Assets Trust plc

Interim Management Statement 

For the Four Month Period from 1 November 2008 to 28 February 2009

Investment Objective

Personal Assets is an investment trust run expressly for private investors. Its capital structure is the simplest possible for an investment trust, consisting only of ordinary shares. Its investment objective is to protect and increase (in that order) the value of shareholders' funds over the long term and to earn as high a total return as is compatible with a risk equivalent to that of the FTSE All-Share Index. Since Personal Assets invests for the long term, the Board assesses performance not annually at the end of each accounting year but over rolling three-year periods.

We aim to pay as high, secure and sustainable a dividend as is compatible with maintaining our investment flexibility. We intend the present dividend rate to grow in real terms and it is our policy never to cut the dividend rate, so shareholders know that each half-yearly payment will at least equal the previous one.

The Board's policy, which since the 2008 AGM has been enshrined in the Company's Articles of Association, is to ensure that the shares of Personal Assets always trade at close to NAV.

Performance Summary

	As at  28 February  2009	As at  31 October  2008	Movement
Market capitalisation	£158.3m	£163.9m	(3.4%)
Shareholders' funds	£154.9m	£164.4m	(5.8%)
Effective liquidity	45.5%	12.6%	-
Share price	£224.00	£222.00	0.9%
Net asset value per share	£219.23	£222.74	(1.6%)
Premium/(discount) to NAV	2.2%	(0.3%)	-
FTSE All-Share index	1,929.75	2,183.69	(11.6%)

Period Review and Material Events

A review of the six months ended 31 October 2008 and of material events that took place during that period will be found in Personal Assets Trust plc's Interim Report. This also contains a review of the principal risks and uncertainties for the remaining six months of our financial year to 30 April 2009.

Between 1 November 2008 and 28 February 2009 we continued to be extremely cautious about the UK and US equity markets. During the period we increased our liquidity from 12.6% to 45.5% and rationalised our portfolio in keeping with our generally unenthusiastic view of equities together with a desire to present our incoming Investment Adviser (see below) with a clean slate. We sold our remaining bank holdings at prices well in excess of those prevailing today and tidied up our US holdings, selling a couple of stragglers to leave us with only two US stocks, Philip Morris International and Bristol-Myers Squibb. We disposed of our disappointing stake in Rentokil and sold three small holdings of investment trusts which had remained in the portfolio since our merger with Collective Assets. By 28 February we had only nine equity holdings remaining: Alliance Trust, BAE Systems, BP, F&C Asset Management, F&C UK Select, GlaxoSmithKline and Royal Dutch Shell in the UK, representing in total 29.3% of shareholders' funds, and Philip Morris International and Bristol-Myers Squibb, representing a further 2.4% of shareholders' funds. It is to be expected that our equity holdings will see further significant change over the two months until our 30 April 2009 year end as a result of the appointment of our new Investment Adviser. 

The Board announced on 3 March 2009 that Troy Asset Management Limited ('Troy') had been appointed as Investment Adviser to Personal Assets with immediate effect, Sebastian Lyon, Chief Executive of Troy, taking on the rôle of lead investment adviser. Troy was established in 2000 by the late Lord Weinstock and at 31st January 2009 had (excluding Personal Assets Trust) £592 million under management, £445 million of which was in equities. It is an owner-managed business, profitable and financially secure, with a stable structure and an experienced investment team. Launched on 31 May 2001, the Trojan Fund, which has the same investment objective as PAT, had by 31 January 2009 produced a total return of 79.7% (7.9% annualised) compared to -5.1% (-0.7% annualised) on the FTSE All-Share Index, which is PAT's benchmark. Based on data to 31 January 2009, Trojan Fund has also been in the top decile of the IMA Balanced Managed Sector over 1, 2, 3, 4, 5, 6 and 7 years, a remarkably consistent record of outperformance which has been achieved by cautious, risk-averse, low turnover investing.

The Advisory Contract is for an initial one year and a rolling six months thereafter. The fee structure, which is based on PAT's shareholders' funds, is as follows: 50 basis points (0.5%) on the first £100 million; 62.5 basis points (0.625%) on the next £50 million; 75 basis points (0.75%) between £150 million and £500 million; and 62.5 basis points (0.625%) thereafter. The fee has been structured to ensure that, taking into account Personal Assets' fixed costs as an independently-managed Company, Personal Assets will consistently maintain a low Total Expense Ratio ('TER') for its shareholders despite variations in the Company's size. As an illustration, had the fee structure been in place throughout the year to 30 April 2008, Personal Assets' TER would have fallen from 1.11% to 0.96%.

Over the four months ended 28 February 2009 the Company purchased 31,934 Ordinary Shares to be held in treasury for a total consideration of £7.2 million, representing 4.3% of the Ordinary Shares in issue at the beginning of the period. During the period the Company also issued 567 Ordinary Shares from treasury at a small premium (adding just over £100,000 of new capital). Since the period end the Company has issued a further 10,669 Ordinary Shares adding £2.3 million of new capital.

Shareholdings as at 28 February 2009

Company	Percentage of shareholders' funds	Percentage of equity exposure
Alliance Trust	9.1	16.7
Royal Dutch Shell 'B'	7.5	13.8
BP	6.9	12.7
GlaxoSmithKline	4.5	8.2
Philip Morris International	2.0	3.7
BAE Systems	0.7	1.3
F&C Asset Management	0.4	0.7
Bristol-Myers Squibb	0.4	0.7
F&C UK Select Trust	0.2	0.4
FTSE 100 Futures	22.8	41.8
Total		100.0

Geographical Analysis as at 28 February 2009

Country	Percentage of shareholders' funds
UK equity exposure (including futures)	52.2
US equities	2.3
Liquidity	45.5
Total	100.0

Sector Distribution as at 28 February 2009

Sector	Percentage of total assets	Percentage of  FTSE All-Share
Oil & Gas	19.4	21.6
Basic Materials	1.6	7.1
Industrials	2.3	7.1
Consumer Goods	5.0	13.3
Health Care	7.0	9.5
Consumer Services	2.4	10.5
Telecom	1.7	7.4
Utilities	1.1	5.0
Financials	3.7	14.6
Investment Trusts	10.0	2.7
Technology	0.3	1.2
Liquidity	45.5	-
Total	100.0	100.0

Additional Information

Further information regarding the Company, including Quarterly Reports and Investment Plan documents can be obtained from the Company's website www.patplc.co.uk or from:

Steven Budge

Personal Assets Trust plc

10 St. Colme Street
Edinburgh EH3 6AA

Telephone: [phone]

Email: [e-mail]

 

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