After a year where the fund lagged its benchmark by some distance, Pacific Assets is seeking to broaden its mandate. The net asset value per share total return was +27.0% over the year ended 31 January 2017. By comparison, the benchmark, the MSCI All Country Asia ex Japan Index measured on a comparable basis, rose by 36.7% over the year. Asian markets generally performed well but a significant element of this increment was as a result of sterling’s decline against the Asian currencies into which the company invests. The fund is paying a dividend for the year of 2.6%.
The manager’s report points out that only a handful of stocks in the portfolio actually lost money during the period. Nevertheless, the fund lagged its benchmark – they think because rising markets flattered the performance of lower quality stocks that the fund does not hold.
The Company’s current Investment Objective is to achieve long-term capital growth through investment in selected companies in the Asia Pacific region and the Indian sub-continent, but excluding Japan, Australia and New Zealand (the ‘Asia Pacific Region’). Up to a maximum of 20% of the Company’s total assets (at the time of investment) may be invested in companies incorporated and/or listed outside the Asia Pacific Region, but whose economic activities are predominantly within the Asia Pacific Region.
The Investment Manager believes that the list of high quality companies that are incorporated and/or listed outside the Asia Pacific Region and which derive a meaningful amount of their economic activities from within this region is growing as companies continue to develop pan-Asian franchises. As a result,
they believe that it would be in shareholders’ interests to amend the Investment Objective to allow up to a maximum of 20% of total assets (at the time of investment) to be invested in companies where the proportion of their economic activities derived from Asia Pacific Region is at least 25% (at the time of investment) but where such activities are expected to grow significantly over the longer-term. Further details of this proposed change can be found on page 35 of the Annual Report & Accounts.
Under the Listing Rules the Company is required to seek approval of shareholders for any material change to its investment objective. An ordinary resolution to approve this change will be proposed at the Company’s Annual General Meeting to be held on Thursday, 29 June 2017 at 12 noon. The proposed amendment has been approved in principle by the Financial Conduct Authority in accordance with the requirements of the Listing Rules.
PAC : Pacific Assets seeks to broaden mandate