Personal Assets Trust, Caution written on a pavement, Photo by Goh Rhy Yan on Unsplash

Personal Assets Trust: Bear Turned Up To 11

A few investment trusts cater to those of a nervous disposition, holding a range of lower-risk assets. Personal Assets Trust, with 58% in cash/short-term bonds and 9% in gold, is perhaps the most bearish of the lot.

Personal Assets’ investment policy is “to protect and increase (in that order) the value of shareholders’ funds per share over the long term”.

In many ways, it’s very similar to Capital Gearing Trust, which I looked at a few months ago. However, Personal Assets is over twice as large and has a much simpler portfolio with far fewer positions.

Key Stats For Personal Assets Trust

  • Listed: 1983
  • Ticker: PNL
  • Manager: Sebastian Lyon (since 2009, aged 52)
  • 10-year net asset return: 84%
  • Benchmark used: FTSE All-Share index
  • Current price: £432.25
  • Indicated spread: £432.00 – £432.50  (0.1%)
  • Exchange market size: 30
  • Results released: June (finals) and November (interims)
  • Market cap: £1,171m
  • Net assets / premium: £425.86 / 1.1%
  • Costs: 0.80% OCF and 0.83% KID
  • Gearing: Nil
  • Current dividend and yield: £5.60 and 1.3%
  • Dividends paid: January, April, July, October
  • Style: Flexible: mixture of global equities, bonds, and gold
  • Links: Website and AIC page

Also notable is an arrangement with Interactive Investor where you can hold shares through an ISA or trading account and Personal Assets will cover the annual fee, online dealing costs and dividend re-investment costs, as long as you only hold Personal Assets in that account.


Personal Assets joined the stock market in 1983 but its current incarnation dates back to 1990 when it switched from Ivory & Sime to become self-managed.

Ian Rushbrook took over as investment manager that year and ran Personal Assets until he sadly passed away in 2008 at just 68 years of age. His philosophy on investment still has a very strong influence on the way the trust is run today.

The 2009 annual report begins with a copy of Rushbrook’s obituary in The Scotsman and it includes his 2007 warning about the state of financial markets:

Is the financial world sleepwalking into disaster? No. It’s worse than that. It’s walking into disaster, wide awake.

Jonathan Davis’s Money Makers has a chapter on Ian Rushbrook covering his early days at Ivory & Sime, running Atlantic Assets in the 1970s and 1980s, and his early years at Personal Assets.

Sebastian Lyon at Troy Asset Management took over in 2009, having already been a Personal Assets shareholder and a devoted follower of the Rushbrook approach. Lyon founded Troy in 2000 and still manages its main Trojan Fund, which has some £4.4bn of assets.

Executive director Robin Angus, who has been on the board since 1984, and Chairman Hamish Buchan, appointed in 2001, are both due to retire following the AGM in July of this year.

Troy Asset Management will become the company’s Investment Manager from May, having been Investment Adviser since 2009, while Iain Ferguson will become Chairman.

Long-term performance

This table from the April 2019 annual report neatly sums up the last three decades.

Note that the net asset, share price and FTSE All-Share figures do not include dividends and therefore don’t reflect the total return achieved:

Personal Assets performance since 1990

Prior to Ian Rushbrook taking the reins in 1990, the trust’s performance was fairly unremarkable. Its first annual report said it was limiting its initial investments to the UK and the US but avoiding Japan due to high valuations (it took several more years before the Japanese market topped out of course).

During the 1980s, Personal Assets generally traded at a discount of between 10 and 30%, while net assets rose from £36 in 1983 to £57 in 1990.

Under Rushbrook, the discount quickly narrowed and the share price rose fivefold in just seven years.

But then Rushbrook started to get more cautious about the stock markets, worried about the impact of the incoming Labour government and high US valuations.

Personal Assets’ liquidity, i.e. the level of cash in its portfolio, has been at least 25% ever since, and often much higher.

For a long time now, the trust has long operated a discount/premium control mechanism to keep its shares trading close to its net asset value.

As you can see from the table above, most of the time Personal Assets has traded at a premium and so it’s been a consistent issue of new shares.

Its share count has risen from around 150,000 to 2.73m over the last 25 years, which is an eighteenfold increase.

A bearish indicator

It’s interesting to look at Personal Asset’s liquidity figure alongside what we now know happened to the stock market.

Liquidity was in the high 40%s in 2000 to 2002 as the dot-com bubble unwound, moving to a relatively aggressive 25% as the market bottomed in the Spring of 2003.

It peaked at 100% at the height of the financial crisis, falling back to 30% in April 2009, which marked another market bottom.

However, liquidity reached 50% as early as 2012 and has continued to rise.

It’s currently 67%, its highest-ever level apart from immediately prior to the financial crisis.


It doesn’t take long to list Personal Assets’ full portfolio:

Holding% of
British American Tobacco3.1%
Sage Group0.8%
Barr (AG)0.6%
American Express2.4%
Philip Morris Int’l2.3%
Berkshire Hathaway1.9%
Procter & Gamble1.7%
Alphabet A1.6%
Agilent Technologies1.1%
Colgate Palmolive1.0%
Total Equities33.1%
Gold Bullion (Physical)8.6%
US TIPS 1.125% 20217.5%
US TIPS 0.125% 20225.1%
US TIPS 1.25% 20204.3%
US TIPS 0.125% 20214.1%
US TIPS 2.375% 20253.6%
US TIPS 0.125% 20203.4%
US TIPS 2.125% 20412.8%
Total Index-linked30.8%
Cash and UK T-Bills24.1%
US T-Bills3.2%
Total Cash and T-Bills27.3%
28 Walker Street,
13 Chester Street Mews,
Total Property0.1%

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Since Lyon took over the mix of US and UK equities has flipped. Whereas UK-listed firms dominated previously, now US shares account for over twice as much.

The UK holdings have a similar look to Lindsell Train’s funds, whereas a certain Buffetness dominates the US positions.

Portfolio turnover is on the low side, with £16m of shares being bought in the last full financial year and £44m being sold, representing just under 10% of the equity portfolio’s value.

Recent disposals over the last couple of years have included Altria, Henkel, Hersey, PZ Cussons, GlaxoSmithKline, and Imperial Oil.

Alphabet, Medtronic, and Agilent have been added as new positions.

Skin in the game

Personal Assets scores very highly on this count.

All the directors have at least 1,000 shares, equating to a holding of at least £0.5m.

Robin Angus has around £2m while Frank Rushbrook, one of Ian Rushbrook’s three children and a non-executive director since 2009, controls nearly £7m.

Sebastian Lyon, although not on the board, also owns nearly £7m.


Personal Assets has rarely yielded much more than 2% and its current yield is a lowly 1.3%. Income devotees are unlikely to be impressed.

In an odd move for a trust not particularly focused on income, it switched from twice-yearly payments to quarterly ones back in 2011.

However, the quarterly payment has remained at £1.40 since October 2011 because, at a meeting in December 2012, shareholders voted to break the previous link between the dividend and inflation.

The stated policy now is “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”.


Given Personal Assets’ size, its charges are probably mid-range.

The fee payable to Troy is:

  • 0.65% on the first £750m of assets;
  • 0.55% between £750m and £1bn; and
  • 0.5% thereafter.

However, you could say that total expenses in excess of £8m look pretty steep compared to other self-managed trusts like Independent or Rights & Issues.

The LifeStrategy conundrum

It’s hard to complain about Personal Assets’ strategy given it’s so clearly stated.

You know that it’s designed to protect your wealth, particularly in savage markets, and it’s always likely to lag when equities have a good run.

The bear market from December 1999 to March 2003 saw the share price drop from £210 to £190. UK markets halved over the same period.

The financial crisis did see a sharp drop in Personal Assets’ share price from £250 in the summer of 2008 to £200 in pretty short order, but it recovered to £250 within a year. UK markets took about two and a half years to recover their losses.

However, it’s interesting comparing how Personal Assets has done compared to Vanguard’s Lifestrategy funds.

The chart below shows the 20% and 40% equity versions since June 2011, when the LifeStrategy funds were launched in the UK:

Personal Assets vs Vanguard Lifestrategy

Personal Assets’ liquidity has averaged around 57% (i.e. 43% equities) over this period, but it’s been beaten by both of these funds even though they had higher bond weightings.

Eyeing the chart shows that 2013 was the chief culprit. As Personal Assets said at the time, “a year in which Greek government bonds rose by 50% and International Airlines Group was one of the best performing shares in the FTSE 100 Index was never likely to be a vintage one.”

Capital Gearing’s record over this period is very similar to Personal Assets, with 2013 an equally difficult time.

I suppose the type of bonds held by these trusts might be a factor. Personal Assets and Capital Gearing have largely been holding very short-term bonds.

The wider range of bonds held by the LifeStrategy funds might have done slightly better because over the decrease in interest rates over this period.

Summing up

I was pretty impressed when looking at Capital Gearing last year, but comparing the recent record of both it and Personal Assets to the LifeStrategy funds has tempered my enthusiasm somewhat.

The events of the 2000s, with two brutal bear markets, vindicated these trusts’ cautious approach. Both outperformed the UK market although Capital Gearing did so by a much wider margin.

The 2010s have been less kind, of course. But when your brief is to protect capital, there will be periods where you turn out to be too cautious.

I have a plan to gradually move my portfolio into more of a defensive mode over the next decade, dialling down my direct stock market exposure.

That’s because I expect to move into more of a decumulation phase and a bit more stability in my portfolio could help protect against any sequence of returns risk.

Right now, I still think trusts like Personal Assets and Capital Gearing, plus something along the lines of LifeStrategy, could play a part in that. But I’m in no great rush, so I’ll keep an eye on how they progress from here.



Please note that I may own some of the investments mentioned above -- you can see my current holdings on my portfolio page.

Nothing on this website should be regarded as a buy or sell recommendation as I'm just a random person writing a blog in his spare time and I am not authorised to give financial advice. Always do your own research and seek financial advice if necessary!

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7 Replies to “Personal Assets Trust: Bear Turned Up To 11”

  1. I think the PNL vs Lifestrategy plot is very interesting. Thanks for presenting it! The distribution yields are also very similar.

  2. Thanks, Rhino. I was a little surprised when I looked at the numbers on that. Previously, I would have guessed that the company picks these trusts made might have compensated for their greater weighting in cash/short-term bonds, but it would appear not.

  3. Nice one! Was looking into Personal Assets earlier this week and then you go and publish this great write-up. Excellent and appreciated.

  4. Many thanks for sharing your thoughts about Investment Trusts. They are very useful and help me make sense of some of my IT holdings built up over the years. I hold CGT and PNL, for instance, and whilst I have not analysed them in the same depth as you have, I have been thinking of selling PNL and doubling my holding in CGT. In the past I have found the quarterly shareholder letters from PNL interesting and amusing, but when it comes to common sense investment thinking they are not in the same league as Warren Buffett’s annual shareholder letters. In addition, the forthcoming retirement of Robin Angus and Hamish Buchan, following the passing of Ian Rushbrook, makes me wonder whether PNL can retain its rather special investment mystique. It is a question I also ponder when looking at the eventual succession at RIT Capital Partners which has been dominated by Lord Rothschild ever since it started. The Rothschild name seems to be one of the main reasons why RCP trades at a constant healthy premium, whilst the wealthy Cayzer family’s Caledonia Investment Trust trades at a 15% discount even though its NAV performance over three and seven years has been better than RCP.

  5. Thanks, Dan and Bill. Glad you both liked the write-up.

    I must admit to only really skimming a few, recent quarterly letters while researching this, but I suspect I will read them more thoroughly when I get the time to do so.

    I didn’t make too much of Angus and Buchan retiring in the article, but long-term shareholders will probably have a better feel than me of how significant it might be.

    And I do wonder if, as these type of management teams age, they generally get more bearish and conservative with their investments, as many of us do! That’s not necessarily a bad thing, of course, but something to be mindful of.

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