Personal Assets Trust vs Trojan O Acc

Prism

It wasn't really the equity funds that did the work during the crash. I had 33% in cash (earning 2.1%) and 7% in a global government bond index ETF going into February. To rebalance I sold the bond fund at a high (lucky) and bought a little more in one of my equity funds almost at a low, which I have since sold to rebalance again. I couldn't bring myself to buy back the bond fund even though its a bit cheaper than I sold it for so used the opportunity to buy some infrastructure funds HICL and GRID, and a touch of property. 
Aside from that the equites are untouched - Fundsmith, LTGE, Smithson, Montanaro Better World and FEET - and the cash is back to my target 30%. 

pinkllama

I bought a fair amount of CGT in late January due to its defensive make-up. 

I noted at the time and in more recent monthly fact sheets that it holds roughly 25% in TIPS. 
I’ve just been sent the latest portfolio update from Capital Gearing and I can only see just over 6% TIPS. 

http://www.capitalgearingtrust.com/investors/portfolio-listings

Am I missing something or have they switched about 20% of the trust from TIPS to Gilts just prior to the 5th of April?

Looking at the portfolio is a reminder of just how many components there are!

I also own a smaller amount in PNL. Will be interesting to see if there’s any change to their TIP holdings. 

Over the past few months volatility I’ve been slightly disappointed with CGT when compared to PNL, Troy Trojan, Troy Trojan Ethical and CGAR. It fell further than them and has lagged them as the market has rebounded. 

bowlhead99

pinkllama said:

Over the past few months volatility I’ve been slightly disappointed with CGT when compared to PNL, Troy Trojan, Troy Trojan Ethical and CGAR. It fell further than them and has lagged them as the market has rebounded. 

The 6 month price chart shows that on 28 November the price was 4350. The debt and equity markets went to hell in a handcart since then, and today the price is 4340 which is the same as yesterday's close price. The NAV announced for yesterday was 4277, so the price was a premium of just under 1.5%, showing that the discount/premium control mechanism isn't working too badly and that prospective investors in the stock are not being forced to pay silly premiums as they embark upon a 'flight to safety'.

During the equities markets crash, the NAV had a drawdown from its peak of about 10% by 19 March, as can be seen from the daily announcements. Which seems fine if you were buying it for defensive qualities. It is not the company's fault if there was a bit of a switch between premium and discount making the share price blip a little more than the 10% (more like 15%), but the discount / premium control mechanism of buying its own shares below NAV where possible and growing the assets by issuing shares at a premium from time to time, generally works well. I don't see anything to be disappointed about really. If you were disappointed that the share price had fallen further than the NAV drawdown, you could have used the opportunity to buy more, as some no doubt did. You know that is the sort of thing you sometimes get with investment trusts.  It's unlikely that you would have specifically needed to exit that particular week, and the company seems to have generally done just fine.

- from today's annual report for the year up to the last portfolio update (which you probably have read, but maybe not if you are asking about the TIPs):
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Shareholders will recall that “the Company’s dual objectives are to preserve shareholders’ real wealth and to achieve absolute total return over the medium to longer term”. The priority to preserve shareholders’ real wealth has been tested severely during the last few months.

The Company’s net asset value per share peaked at 4,382p on 20 February 2020 when the closing share price was 4,480p. Investors scarcely need reminding of the cataclysm that ensued. By 19 March, the overall UK equity market had declined by 32.8%. At the same date the Company’s net asset value (“NAV”) had suffered a maximum drawdown of 9.9%; severe enough, but still a testament to the investment manager’s cautious asset allocation and evidence of the defensive features of the portfolio when faced with a market decline of historic dimensions. Throughout this turbulent period, the operation of the Company’s discount and premium control policy (“DCP”) ensured a robust and orderly secondary market with both adequate liquidity and pricing stability relative to the NAV.

Thanks to the subsequent bear market rally, a well-timed switch into longer duration US Treasury Inflation Protected Securities (“TIPS”) and helpful currency movements in the last couple of weeks of the financial year, the Company managed to come out practically level over the full twelve months. As at 5 April 2020, the NAV per share was 4,084.2p, a total return of 0.8% for the year. The share price rose by 0.5%, ending the year at 4,190p. This very modest growth in NAV per share considerably outperformed the 24.8% fall in the MSCI UK Index but failed to beat inflation as measured by the UK Retail Price Index (+2.6%) for only the third time since 1982. 

Towards the end of 2019, the investment managers had reduced exposure to some more risky assets and the sharp correction from late February allowed the repurchase of several of these disposals at attractive levels. Abnormally large currency swings also allowed the portfolio to capture some significant currency gains and to reposition the US TIPS portfolio towards more attractive longer duration holdings. Further detail on portfolio movements is provided in the report from the investment managers.