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Changes at Personal Assets (PNL)

Closed-end funds and OEICs
StOmer

Changes at Personal Assets (PNL)

#229447

Postby StOmer » June 14th, 2019, 11:50 am

I wonder if anyone has views on the changes at PNL with Angus, Rushbrook, and Buchan all retiring?

forlesen
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Re: Changes at Personal Assets (PNL)

#229483

Postby forlesen » June 14th, 2019, 1:59 pm

I was initially confused by your post, as the much better known Ian Rushbrook died over 10 years ago!

The general topic is dealt with in the last three paragraphs of Hamish Buchan's Chairman's Statement in the last Annual Report, for the year ended 30 April 2019:

Last year I described how since 2016 we had diversified and strengthened the Board’s composition by the
recruitment of Jean Sharp, Iain Ferguson and Paul Read, and I also mentioned that Frank Rushbrook had
intimated that he would like to retire after the 2019 AGM on completing ten years’ service. Frank has been
a hard-working and enthusiastic Director with a special concern for the needs of private shareholders. We
are most grateful to him and we shall miss him as a Director, although glad that he remains a shareholder
and a friend.
Next year we can also look to further diversifying and strengthening of the Board as Robin Angus and I retire
after completing 36 and 19 years of service respectively. We will, however, remain closely involved (perhaps
through a charitable foundation) in preserving and extending Personal Assets’ legacy of commitment to
financial education and research as well as making more widely known the benefits for individual investors
of investing through investment trusts. As our plans for this develop we shall keep you in touch and hope you
will share our enthusiasm for continuing the work which Ian Rushbrook began. The Board has agreed that
on my retirement Iain Ferguson will take over as Chairman and I wish him every success when he takes over
from me next year.
As I wrote last year, continuity and collective memory are extremely important to any Board and especially
to one with Personal Assets’ long tradition of independent thought and action. With this in mind, Gordon
Neilly has agreed to stay on (subject to re-election) as a Director over this period of change specifically in order
to provide such continuity. To give maximum scope to new Directors as they begin their duties, Gordon will
not be a member of any of the Board Committees.


All in all, I would expect no major changes in the running of the trust, assuming the long-running investment adviser Sebastian Lyon continues in his role. But we'll have to wait and see how the plans mentioned above develop.

forlesen
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Re: Changes at Personal Assets (PNL)

#229489

Postby forlesen » June 14th, 2019, 2:14 pm

I meant to add that the forthcoming AGM is at 12:00 on Thursday 11 July at the Kimpton Charlotte Square Hotel, Edinburgh, EH2 4HQ.

That should be an excellent opportunity to ask for further information. If any Fools are attending this, I for one would be interested to hear what they say.

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Re: Changes at Personal Assets (PNL)

#229499

Postby Lootman » June 14th, 2019, 2:37 pm

forlesen wrote:I would expect no major changes in the running of the trust, assuming the long-running investment adviser Sebastian Lyon continues in his role.

Yes, the only changes of significance that I can recall in twenty years of owning PNL was when Lyon took over. He reduced the dependence on UK large-cap names, and made the fund more international. That was crucial in my view - you may recall that Rushbrook went into the mortgage crisis with a boatload of RBS (and Lloyds as well IIRC) and that prevented PNL from doing its job in the downturn. It still did much better than the market, but was down about 20% at one point, which in my view contradicts the primary objective of not losing money.

I actually think that shedding these old stalwarts might be helpful in giving PNL a new edge. Even Buffett has bought shares in Apple and Amazon, and at some point the strategy of waiting and waiting for a bear market so that it can shine tests ones patience.

But it is still my second largest IT holding. It used to be my biggest but I sold off a good chunk a few years ago, and Lindsell Train since has leapfrogged it. Holding both definitely feels like diversification . .

StOmer

Re: Changes at Personal Assets (PNL)

#229531

Postby StOmer » June 14th, 2019, 3:58 pm

Thanks for the comments. I remember a PNL suggestion once was that perhaps Personal Assets (PNL) and Scottish Mortgage (SMT) might be a good pairing but well done on choosing Lindsell Train. As a previous holder of Troy funds, I was pleased to see them get the PNL mandate and we continue to hold it although currently less than previously, I am reviewing Personal Assets at the moment with a thought to increase our holding but may go back into Capital Gearing (CGT) or increase Troy Income & Growth (TIGT).

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Re: Changes at Personal Assets (PNL)

#229541

Postby Aminatidi » June 14th, 2019, 4:27 pm

I'm slightly confused by a couple of posts.

I hold around 40% in CGT and the rest between various Lindsell Train and Fundsmith.

PNL is considered defensive but one of the posts above suggests it was "replaced" with Lindsell Train or TIGT.

Surely they're chalk and cheese?

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Re: Changes at Personal Assets (PNL)

#229551

Postby Lootman » June 14th, 2019, 4:57 pm

Aminatidi wrote:I'm slightly confused by a couple of posts.

PNL is considered defensive but one of the posts above suggests it was "replaced" with Lindsell Train or TIGT.

Surely they're chalk and cheese?

If you are referring to my post then what I was saying is that I hold both PNL and LTI. They are my two largest IT holdings and I and find them to be an odd but complementary couple.

I also hold CGT and SMT but in smaller allocations.

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Re: Changes at Personal Assets (PNL)

#229566

Postby Aminatidi » June 14th, 2019, 5:34 pm

Lootman wrote:
Aminatidi wrote:I'm slightly confused by a couple of posts.

PNL is considered defensive but one of the posts above suggests it was "replaced" with Lindsell Train or TIGT.

Surely they're chalk and cheese?

If you are referring to my post then what I was saying is that I hold both PNL and LTI. They are my two largest IT holdings and I and find them to be an odd but complementary couple.

I also hold CGT and SMT but in smaller allocations.


Thanks, yes, it threw me a bit when you mentioned that you sold off PNL and LTI had leapfrogged it - only because it seems like chalk and cheese and you'd absolutely expect it to leapfrog it :)

I keep being tempted but it's ultimately a big bet on the Lindsell Train business and if that 100% premium pops I'm not sure I'd fancy my nerve :)

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Re: Changes at Personal Assets (PNL)

#229577

Postby XFool » June 14th, 2019, 5:51 pm

Aminatidi wrote:I keep being tempted but it's ultimately a big bet on the Lindsell Train business and if that 100% premium pops I'm not sure I'd fancy my nerve :)

I remember, ages ago now, when I was considering buying Lindsell Train IT, I didn't go ahead at the time and never bought it. For some reason I can always remember its price at that time, 113p. :lol:

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Re: Changes at Personal Assets (PNL)

#229625

Postby Spet0789 » June 14th, 2019, 10:30 pm

I really like reading the quarterlies from PAT but I can’t get away from the concern that it’s basically trying to time the market.

At the moment, around 30% is invested in Train / Smith style global quality, 10% in gold and the rest in short duration gilts, Treasuries and TIPS.

I can replicate that basket for about 25% of PNL’s fees and with no premium.

The manager seems to me to want to wait with 70% of the NAV in cash, gold and bonds while the market feels expensive and then wade into equities when valuations are more attractive.

Great in theory but will it work?
Last edited by Spet0789 on June 14th, 2019, 10:43 pm, edited 2 times in total.

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Re: Changes at Personal Assets (PNL)

#229626

Postby Dod101 » June 14th, 2019, 10:34 pm

You can get exposure to Lindsell Train IT through Finsbury Growth and Income. Finsbury is managed by Nick Train and has done quite well.

Dod

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Re: Changes at Personal Assets (PNL)

#229628

Postby Dod101 » June 14th, 2019, 10:36 pm

Spet0789 wrote:I really like reading the quarterlies from PAT but I can’t get away from the concern that it’s basically trying to time the market.
.


If it is trying to time the market it is not doing a very good job of it.

Dod

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Re: Changes at Personal Assets (PNL)

#229629

Postby forlesen » June 14th, 2019, 10:57 pm

You can get exposure to Lindsell Train IT through Finsbury Growth and Income...


Note that Finsbury actually only holds a small slice of Lindsell Train IT, 0.9% at the last half yearly report.

I would agree that if you ignore the huge slice of Lindsell Train Ltd shares held by Lindsell Train IT (46% of the entire NAV), many of the holdings of the two ITs are similar: Diageo, RELX, Unilever, LSE, etc.

On a wider note, and getting back on topic, it's nice to find there are plenty of other substantial holders of Personal Assets out there!

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Re: Changes at Personal Assets (PNL)

#229658

Postby Aminatidi » June 15th, 2019, 9:18 am

Spet0789 wrote:I really like reading the quarterlies from PAT but I can’t get away from the concern that it’s basically trying to time the market.


I thought it was the exact opposite and it's almost getting towards being a Harry Brown portfolio.

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Re: Changes at Personal Assets (PNL)

#229667

Postby toofast2live » June 15th, 2019, 9:53 am

Dod101 wrote:
Spet0789 wrote:I really like reading the quarterlies from PAT but I can’t get away from the concern that it’s basically trying to time the market.
.


If it is trying to time the market it is not doing a very good job of it.

Dod


He’s not timing the market. As he clearly states he will buy equities when he sees value. He doesn’t see value therefore he doesn’t buy.

PNL is like insurance. You lose out to the feckless uninsured every year - until you need to claim!

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Re: Changes at Personal Assets (PNL)

#229679

Postby Dod101 » June 15th, 2019, 10:49 am

toofast2live wrote:
He’s not timing the market. As he clearly states he will buy equities when he sees value. He doesn’t see value therefore he doesn’t buy.

PNL is like insurance. You lose out to the feckless uninsured every year - until you need to claim!


I did not claim they were trying to time the market.

I used to own Personal Assets and knew it quite well, but gave up because I could not see the point. Supposing it does hold up in a market sell off, so what? It would only ever be a small proportion of my portfolio so it wold not make much difference and the static dividend is not even open to foreign exchange variations. The dividend has been at its current level for maybe 10 years? I have not looked, and it has of course been steadily losing purchasing power over that time.

I see it as one of those vehicles which suits the Edinburgh elite, and gives them a suitable place to park a million or two, and that of course is who it is designed for. It is of little value to the ordinary mortal.

Dod

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Re: Changes at Personal Assets (PNL)

#229704

Postby Spet0789 » June 15th, 2019, 1:01 pm

Aminatidi wrote:
Spet0789 wrote:I really like reading the quarterlies from PAT but I can’t get away from the concern that it’s basically trying to time the market.


I thought it was the exact opposite and it's almost getting towards being a Harry Brown portfolio.


Right now, it does look like the permanent portfolio (25% of gold, cash, equities, bonds) but the aim of Personal Assets is to move more into equities when they think the time is right.

The Permanent Portfolio is intended to maintain those weights throughout the cycle.

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Re: Changes at Personal Assets (PNL)

#229705

Postby Spet0789 » June 15th, 2019, 1:03 pm

toofast2live wrote:
Dod101 wrote:
Spet0789 wrote:I really like reading the quarterlies from PAT but I can’t get away from the concern that it’s basically trying to time the market.
.


If it is trying to time the market it is not doing a very good job of it.

Dod


He’s not timing the market. As he clearly states he will buy equities when he sees value. He doesn’t see value therefore he doesn’t buy.

PNL is like insurance. You lose out to the feckless uninsured every year - until you need to claim!


Isn’t that the absolute definition of trying to time the market? Lyon waits in cash until he thinks it’s right to buy equities.

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Re: Changes at Personal Assets (PNL)

#229714

Postby Julian » June 15th, 2019, 1:49 pm

Spet0789 wrote:
Aminatidi wrote:
Spet0789 wrote:I really like reading the quarterlies from PAT but I can’t get away from the concern that it’s basically trying to time the market.


I thought it was the exact opposite and it's almost getting towards being a Harry Brown portfolio.


Right now, it does look like the permanent portfolio (25% of gold, cash, equities, bonds) but the aim of Personal Assets is to move more into equities when they think the time is right.

The Permanent Portfolio is intended to maintain those weights throughout the cycle.

So basically the management fees that one is paying to PNL are for hoped-for expertise in assessing when the time will be right to move more into equities. While PNL is playing that waiting game one could create one's own permanent portfolio far more cheaply using EFTs and/or open-ended trackers such as Vanguard stuff.

I do actually hold PNL as one of my 4 supposedly wealth-preservation funds with, on purchase, funds split in equal measure between Personal Assets (PNL), Ruffer (RICA), Capital Gearing (CGT) and RIT Capital Partners (RCP). Personally I'd never quite accepted the inclusion of RCP in that wealth preservation category given its investments in unlisted companies, I always saw it as more of a growth play (and when I bought it had a negligible yield but has since revised its divi policy); the relative values of my 4 "wealth preservers" now with RCP way out in front seems to me to support my instinct there but the proof of the pudding will of course be in the downturns.

I'm beginning to wonder about my wealth preservers, in particular PNL (and not including RCP in my concerns). PNL might yet be for the chop at some point in the not that distant future with funds released going to passive trackers.

- Julian

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Re: Changes at Personal Assets (PNL)

#229724

Postby richfool » June 15th, 2019, 2:23 pm

Julian wrote:
Spet0789 wrote:
Aminatidi wrote:
I thought it was the exact opposite and it's almost getting towards being a Harry Brown portfolio.


Right now, it does look like the permanent portfolio (25% of gold, cash, equities, bonds) but the aim of Personal Assets is to move more into equities when they think the time is right.

The Permanent Portfolio is intended to maintain those weights throughout the cycle.

So basically the management fees that one is paying to PNL are for hoped-for expertise in assessing when the time will be right to move more into equities. While PNL is playing that waiting game one could create one's own permanent portfolio far more cheaply using EFTs and/or open-ended trackers such as Vanguard stuff.

I do actually hold PNL as one of my 4 supposedly wealth-preservation funds with, on purchase, funds split in equal measure between Personal Assets (PNL), Ruffer (RICA), Capital Gearing (CGT) and RIT Capital Partners (RCP). Personally I'd never quite accepted the inclusion of RCP in that wealth preservation category given its investments in unlisted companies, I always saw it as more of a growth play (and when I bought it had a negligible yield but has since revised its divi policy); the relative values of my 4 "wealth preservers" now with RCP way out in front seems to me to support my instinct there but the proof of the pudding will of course be in the downturns.

I'm beginning to wonder about my wealth preservers, in particular PNL (and not including RCP in my concerns). PNL might yet be for the chop at some point in the not that distant future with funds released going to passive trackers.

- Julian

I have in the past held most of the wealth preservers, at one time or another, and then subsequently sold as I felt I was paying a premium to go nowhere. In addition to a couple of multi-asset IT's, I am currently accumulating a holding in CASH, along with a small quantity gold already held through an ETF (SGLN), as my wealth preservers. They cost me very little to hold (only the possible loss of performance as compared to equities), and like CGT, PNL, etc, will provide me with some "dry powder" if markets fall.


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