Wary Personal Assets maintains high liquidity

Wary Personal Assets maintains high liquidity – Personal Assets has released results for the year ended 30 April 2019, just six weeks after the period ended! Over the year, the net asset value rose by 4.3%. This compares to a fall of 1.4% in the All-Share Index and a 2.9% increase in inflation, as measured by RPI. The trust is paying annual dividends of £5.60. In 2018/19 the dividend was covered 90% by net revenue and the balance came from the trust’s revenue reserve. During the year it issued 179,842 shares for a total of GBP71.6 million.

High levels of liquidity

During the year, the trust continued to maintain a high level of liquidity (64% at At 30 April 2019). This included 21.0% in UK Treasury Bills, UK cash, overseas cash, and net current liabilities and 43.0% in various classes of non-equity risk assets: 27.8% in US TIPS (inflation-linked securities); 3.8% in US Treasuries; 8.1% in Gold Bullion; and 3.3% in UK Index-Linked Gilts.

Board refresh

Frank Rushbrook, son of former manager Ian Rushbrook, is leaving the board at the AGM after 10 years. Next year, Hamish Buchan and Robin Angus will retire from the board after completing 36 and 19 years of service respectively. The trust has had a remarkable record over their tenure.
A couple of quotes from the statement give you the measure of the board’s thinking on markets – “We are wary of management teams that allocate capital as if it were ‘other people’s money‘. Regrettably, this becomes more common later on in the cycle, when capital becomes all too readily available.” the example used here was the $13bn purchase of vaping company Juul by US tobacco giant Altria on, what they believe was a 40x earnings multiple. Also, “We are at that dangerous stage in the market cycle when too much liquidity in the system has caused share prices to rise without much improvement to earnings, a sign of investor insensitivity to valuation risk. Corporate indebtedness is at record highs. This has brought forward demand and flattered margins but the economic cycle is at its peak, not a trough. To us, the prospective rewards look less than compelling when compared to the risks.”
PNL : Wary Personal Assets maintains high liquidity

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