Protect and increase (in that order)
Our shareholders, and potential investors in the Trust, will tend to seek an emphasis firstly on capital preservation, as well as the potential for capital growth.
Central to Personal Assets Trust’s ethos is the protection of investors’ capital. Our approach is conservative, with attention paid first and foremost, to the downside risk of any investment. Our definition of ‘‘risk’’ is fundamentally different from that commonly used by other global investment trusts and the industry at large, ours being ‘‘risk of losing money’’ rather than ‘‘volatility of returns relative to an index’’.
Taking this as our definition of risk, the board will usually, although not invariably, prefer the Trust’s portfolio as a whole to have a lower level of risk than the FTSE All-Share Index (TR). Click here to see the Trust’s performance over time.
This investment philosophy informs the construction of Personal Assets Trust’s portfolio, which is invested across four main asset classes seeking to provide shareholders and potential investors with a ready-made diversification of risk and source of return. Personal Assets Trust can therefore form a valuable corner-stone investment within a larger diversified portfolio, or a stand-alone investment solution for investors who are just starting out on their investing journey.
Discount Control Mechanism
Through the Discount Control Mechanism (“DCM”), the Trust is committed through its Articles of Association to buying-in shares when there is excess supply in the market and issuing shares when there is excess demand. This provides liquidity to investors and aims to ensure, in normal market conditions, that the share price trades at close to the underlying net asset value (“NAV”) on an ongoing basis.
Potential benefits of the DCM to shareholders:
The removal of discount volatility and therefore enhanced risk adjusted returns.
Greater secondary market liquidity through growth in shares in issue.
The provision of primary market liquidity by the Trust, should the secondary market not be sufficiently liquid.
NAV enhancement through share issuance at a small premium and repurchase at a small discount.
The potential for share issuance to dilute the fixed costs of the Trust.
The DCM also increases the liquidity of PAT. Subject to certain required shareholder approvals, the DCM has the potential to provide for near unlimited secondary market liquidity for investors.
Oversight of the PAT board
The Trust is overseen by an independent board of directors. By engaging with and listening to shareholders, the board ensures that the Trust continues to offer a distinctive investment proposition that is relevant to investors’ needs. All our board members and managers are significant shareholders in the Trust.
The Trust aims to pay as high, secure and sustainable a dividend as is compatible with protecting and increasing the value of its shareholders’ funds per share and maintaining its investment flexibility. Dividends are paid in July, October, January and April of each year.
The Trust offers a Dividend Re-Investment Plan (“DRIP”) facility to shareholders who hold their shares on the main register. The DRIP allows your cash dividends to be used to purchase shares at current market prices, on your behalf. You will not receive any cash dividends while you remain in the plan, only additional shares. Any cash balance remaining after buying the shares, including the dealing costs, or any cash dividend which is not enough to buy one share, will be carried forward (without interest) and added to your next dividend. The commission charge is 0.5%, subject to a minimum fee of £1.75. Stamp Duty Reserve Tax, charged at 0.5% of the value of shares that you buy, will also be paid from your dividend proceeds on your behalf.
If you wish to participate in the DRIP, please contact Equiniti on 0371 384 2459 (or 0121 415 7047).