Investment Manager’s Report
Over the year to 30 April 2026, the net asset value total return per share of Personal Assets Trust (‘PAT’) rose by 6.3% while our traditional comparator, the FTSE All-Share Index total return was 25.2%. The UK Consumer Price Index (‘CPI’), which we also use as a comparator (see the inside front cover of this Report and Key Features and Record 1990-2025 on pages 3 and 63 respectively), rose by 2.8%. The Company’s NAV and share price (thanks to the discount control policy) continued to demonstrate below-average volatility compared to peers and the stock market.
Our aim is to protect and grow shareholders’ capital over the long term. This period of performance was an uninspiring one for the Company, at a time when stock markets were strong. Our equities in aggregate contributed around a third of the
Company’s return (they were up approximately 6% over the period), with gold contributing the bulk of the rest – it was up approximately 41% over the year. This aggregate performance from the equities was comprised of divergent parts, with the
Company’s largest holding, Alphabet, rising 140% over the twelve months and new holdings like Hubbell and Canadian National appreciating 42% and 17% respectively. These were in part offset by poor performance from the likes of Diageo and Experian, both down 27% over the period.
The Company’s financial year encompassed considerable change, starting with the continued strong recovery of stock markets in the aftermath of so-called Liberation Day. Beneath the surface of market indices however (which were led higher
by defence and financials in the UK and by tech and industrials in the US), there have been strong winners and severe losers. AI has been a persistent and dominant theme, with major casualties from a share price perspective in the software
and information services sectors. Investors are grappling with the impact of AI on companies’ terminal values, questioning the sustainability of current rates of growth and profitability. In the same way that during the internet boom and bust
26 years ago investors sought to target businesses that would be disrupted by the web, the market is moving fast to price in unknowable change.
We expect that the noise will continue throughout 2026 as OpenAI, Anthropic and SpaceX seek to IPO in the coming months. The valuations for these Large Language Model (‘LLM’) companies currently stand at $850bn, $800bn and $1.3tn
respectively. Anthropic’s value more than doubled last month, from $380bn. These will rank as the largest IPOs on record and, in order to justify these valuations, we expect that the rapid pace of new releases from the LLM companies to continue unabated. Large, profitable sectors will continue to be targeted as the companies seek to build credible revenue streams to justify the investment. The market, having initially assumed a ‘shoot first, ask questions later’ approach, appears to be starting to discriminate when it comes to the so-called ‘AI losers’. London Stock Exchange Group (‘LSEG’), for example, has
rallied strongly from its February lows as the market appreciates the value in its proprietary datasets, which AI will struggle to replicate.
Meanwhile, the war with Iran provided the fourth material supply shock for the global economy this decade, following the pandemic in 2020, the invasion of Ukraine in 2022 and tariffs in 2025. Central banks struggling to reach their inflation targets are today facing the spectre of stagflation once again. This is confirmation, if it were needed, that the 2020s are proving a more inflationary decade than the 2010s. The month of March in particular was a difficult month for a raft of companies facing higher input cost inflation. These included some of the consumer staples companies owned in the portfolio. Bond yields on both sides of the Atlantic have risen, with the UK 10-year yield breaching the 5% level for the first time since 2008. As investors will know, we own predominantly index-linked securities with modest duration for precisely the reason that we want inflation protection but do not want exposure to duration if expectations for interest rates rise.
March was also a challenging month for the gold price, which declined as investors and central banks sold to access liquidity, and in response to higher bond yields. At the end of January, we reduced the gold holding in PAT from 14% to
10% when the price reached over $5,100. Whilst we remain bullish long term on gold and expect continued demand as both investors and central banks move away from the dollar, we are also conscious of how fast it had appreciated, and how
exuberant some of the purchasing behaviour was becoming. We are, as such, unsurprised by its recent setback.
In 2025, in the expectation of sustained US dollar weakness, we decided to begin a holding (~10%) in yen through the purchase of short-dated Japanese Government Bonds, a first for the Company. Thus far, the yen has modestly depreciated,
but this does not unduly concern us because we expect it to strengthen when other assets, such as equities, are weak. The Japanese currency is the cheapest it has been for four decades and the dollar has risen by 55% against the yen since
2020, moving well away from purchasing power parity. We believe the holding will provide us with good diversification and an offset, should stock markets become more risk averse. The volume of yen-denominated borrowings allocated to global risk assets continues to be substantial. BCA Research estimates that total yen claims in overseas financial centres amount to approximately $650 billion. This has meant historically that investors will tend to repatriate their borrowings back into yen during crises, leading the currency to strengthen. There is also the fact that the weak yen is problematic for the domestic economy. The Japanese consumer is already battling with a cost-of-living crisis that is being exacerbated by the weak currency. There is growing political impetus to address the problem.
In terms of portfolio activity, we have made a handful of additions to the portfolio and sold a few holdings where prospective returns looked poor. In addition to LSEG, we added both Hubbell and Alcon to the portfolio last year. Alcon is the largest eye care device company in the world with its surgical and vision care products (contact lenses and lens care products) touching the lives of people in over 140 countries with conditions such as cataracts or glaucoma. Following a de-rating in the shares, we started a modest holding. Hubbell is the leading US manufacturer of essential infrastructure components for electric utilities, offering the broadest and most reliable product portfolio in the industry. Its solutions are critical to the safe and uninterrupted operation of the power grid, with a low relative cost compared to the high risk of failure, making them indispensable to utility customers who prioritise quality and resilience. Founded in 1888, Hubbell has a long track record of superior value creation, compounding total shareholder returns at approximately 15% annually over the past 20 years, well ahead of the S&P 500. Three companies were sold from the portfolio during the period: American Express, Moody’s and LVMH.
Markets appear remarkably complacent about the threats posed from the conflict in the Gulf. With energy reserves running low, the world’s economy is running on fumes. The impact of lost oil output is yet to be felt. If the Strait of Hormuz is not
reopened soon, the tail risk of a stagflationary outcome may become an inevitability. GDP cannot grow without energy. Meanwhile, stretched government balance sheets provide minimal slack for more stimulative handouts (and such measures
risk further fanning the flames of inflation). With all this in mind, the Company exits its financial year with 36% of the portfolio in equities, 30% in index-linked bonds, 9% in gold and the rest in liquidity, including the Japanese yen. This is
defensive positioning at a time when markets are making new all-time highs. As opportunities emerge, we will continue to add selectively to risk when we are paid to take it
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Please refer to Troy’s Glossary of Investment terms here. Performance data relating to the NAV is calculated net of fees with income reinvested unless stated otherwise. Past performance is not a guide to future performance. Overseas investments may be affected by movements in currency exchange rates. The value of an investment and any income from it may fall as well as rise and investors may get back less than they invested. The historic yield reflects distributions declared over the past twelve months as a percentage of the Trust’s price, as at the date shown. It does not include any preliminary charge and investors may be subject to tax on their distributions. Tax legislation and the levels of relief from taxation can change at any time. The yield is not guaranteed and will fluctuate. There is no guarantee that the objective of the investments will be met. Shares in an Investment Trust are listed on the London Stock Exchange and their price is affected by supply and demand. This means that the share price may be different from the NAV. Information on the risks of an investment in the fund can be found in the Prospectus.Neither the views nor the information contained within this document constitute investment advice or an offer to invest or to provide discretionary investment management services and should not be used as the basis of any investment decision. Any decision to invest should be based on information contained within the Investor disclosure document the relevant key information document and the latest report and accounts. The investment policy and process of the Trust(s) may not be suitable for all investors. If you are in doubt about whether the Trust(s) is/are suitable for you, please contact a professional adviser. References to specific securities are included for the purposes of illustration only and should not be construed as a recommendation to buy or sell these securities. Although Troy Asset Management Limited considers the information included in this document to be reliable, no warranty is given as to its accuracy or completeness. The opinions expressed are expressed at the date of this document and, whilst the opinions stated are honestly held, they are not guarantees and should not be relied upon and may be subject to change without notice. Third party data is provided without warranty or liability and may belong to a third party. Ratings from independent rating agencies should not be taken as a recommendation.Please note that the Personal Assets Trust is registered for distribution to the public in the UK and to Professional investors only in Ireland.Although Troy’s information providers, including without limitation, MSCI ESG Research LLC and its affiliates (the “ESG Parties”), obtain information from sources they consider reliable, none of the ESG Parties warrants or guarantees the originality, accuracy and/or completeness of any data herein. None of the ESG Parties makes any express or implied warranties of any kind, and the ESG Parties hereby expressly disclaim all warranties of merchantability and fitness for a particular purpose, with respect to any data herein. None of the ESG Parties shall have any liability for any errors or omissions in connection with any data herein. Further, without limiting any of the foregoing, in no event shall any of the ESG Parties have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. All references to FTSE indices or data used in this presentation is © FTSE International Limited (“FTSE”) 2025. ‘FTSE ®’ is a trademark of the London Stock Exchange Group companies and is used by FTSE under licence. Issued by Troy Asset Management Limited (registered in England & Wales No. 3930846). Registered office: 33 Davies Street, London W1K 4BP. Authorised and regulated by the Financial Conduct Authority (FRN: 195764) and registered with the U.S. Securities and Exchange Commission (“SEC”) as an Investment Adviser (CRD: 319174). Registration with the SEC does not imply a certain level of skill or training. © Troy Asset Management Limited 2026.