LONDON (ShareCast) - (Sharecast News) - Personal Assets Trust delivered a positive first half, recording a 5.6% net asset value total return in the six months to 31 October, although it significantly lagged the broader UK equity market as defensive positioning tempered gains during a strong rally for risk assets.
NAV per share rose to 540.24p from 515.22p at the previous year-end, while the share price increased 6.0% to 537p.

Its shares continued to trade close to asset value, ending the period at a 0.6% discount.

The FTSE 250 trust continued to implement its discount control mechanism, repurchasing 7.1 million shares for £36.5m at a small discount and issuing 1.5 million shares from treasury at a premium, generating proceeds of £7.9m.

Shareholders received two interim dividends of 1.4p each during the period, with a third due in January and a fourth planned for April, taking the total payout for the financial year to 5.6p per share barring unforeseen circumstances.

Equities and gold remained the main drivers of returns, contributing 3.0% and 2.6% respectively.

The only drag came from currency movements, which subtracted 0.1%.

The managers said global markets had rebounded sharply from April lows, helped by AI-related gains, which fuelled strong performance among "Nasdaq listed with no revenues" and "unprofitable small/mid caps".

By contrast, defensive sectors such as consumer staples and healthcare had seen little investor interest despite housing "an increasing number of opportunities in the types of companies we favour."

Gold continued its bull run, appreciating around 23% in sterling terms over the period and 45% year-to-date, prompting the trust to take profits to maintain the holding at a "low teens" percentage of the portfolio.

The managers noted risks of a short-term setback, citing historical instances where gold initially fell during periods of market stress before outperforming as conditions stabilised.

The trust made several portfolio changes, adding holdings in Hubbell, London Stock Exchange Group and Alcon, while reducing positions in Alphabet, Microsoft and Verisign.

It exited Moody's, American Express and LVMH on concerns about valuations.

The managers described Hubbell as a business benefiting from long-term investment needs in electricity infrastructure and said LSEG's transformation into a data and analytics business was undervalued despite reporting strong sales growth.

Market exuberance later in the period raised concerns of a potential bubble, with the report highlighting OpenAI's $500bn valuation despite modest revenues and the S&P 500 Shiller price-to-earnings ratio reaching levels last seen during the dot-com boom.

In response, the trust said it continued to hold defensive assets including gold, Japanese yen, liquidity and short-dated index-linked bonds, retaining "ample liquidity to lean into market opportunities when they arise."

At 0919 GMT, shares in Personal Assets Trust were down 0.18% at 544p.

Reporting by Josh White for Sharecast.com.

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