Pacific Assets outperforms benchmark in a turbulent 2018 – Pacific Assets Trust has announced its results for the year ended 31 January 2019. The trust was able to outperform the MSCI All Country Asia ex Japan Index. NAV total return was +4.7%, with the benchmark returning -7.7%. NAV total return was down 8.1% from the year prior, however. Share price in total return terms was +8.1%, a 4.7% decrease from the previous year. This reflects the narrowing of the discount, and over the last five years, the NAV per share in total return terms has been +13.0%. During the 2018 year, the company commented that there was no clear pattern of what worked and what did not. Some long-hold positions such as Vitasoy International and Tech Mahindra proved their value in a market climate where defensiveness and quality stood out. Another thing to note is the composition of the portfolio is vastly different from the exposure found in the benchmark index, something that is evidenced by the discrepancy in NAV total return between the index and the trust.
James Williams, chairman at Pacific Assets, commented, “A year ago, I highlighted concern about the effect that contraction of liquidity might have on risk asset values around the world. Although pressures on interest rates and liquidity appear to have eased, we are seeing an economic effect with signs of a slowdown in some key economies, and a fall in manufacturing. Within the Asian region, Chinese demand has slowed notably. It remains to be seen how much impact this trend will have on corporate profits.
The company’s portfolio is built around companies that can access opportunities that will stand them in good stead over the longer term. While there are questions over the economic background in which these companies trade in the year ahead, we believe that the strength of their business models and the quality of their balance sheets will help to ensure that they can be defensive in difficult times while maximising opportunity in their chosen fields. Most of all our investment manager seeks out managements that are working to create value for the long term, and in this they will be aligned to the needs of our shareholders.”
PAC : Pacific Assets outperforms benchmark in a turbulent 2018