Pacific Assets widens investment scope beyond Asia Pacific sector

Group gives Gait and Paul freedom to invest up to 20% in stocks listed outside region.

The board of the £162m Pacific Assets investment trust, managed by First State, has widened its parameters to allow investments in companies located outside of the Asia Pacific region.

The trust’s managers David Gait and Stuart Paul are now able to invest up to 20% of the portfolio in stocks listed outside the region, providing their economic activities are based within Asia Pacific.

The board said in a statement it decided to shake-up the investment objective  to  allow  the managers to tap into companies benefitting from growth in the region despite being listed elsewhere.

“We still believe investing in the Asia Pacific region remains an attractive proposition,” said the board.

“However, there are now many companies whose economic activities are predominantly within the Asia Pacific region but their shares are listed elsewhere.

The board added the change would be beneficial to shareholders, giving the managers a wider opportunity set.

The resolutions were passed by shareholders in last week’s AGM.

The revamp comes a year after First State took over management of the trust from F&C, following prolonged underperformance.

Over the past year, performance has failed to pick up, with the trust languishing in the bottom quartile of the Asia Pacific ex Japan sector, returning 5.9% compared to the peer group average of 15%, according to Morningstar. 

Matthew Hose, an investment trust analyst at J.P. Morgan Cazenove, welcomed the move, saying it will allow the trust to differentiate itself from the peer group.

“The change highlights the increasingly prevalent view that as companies become more globalised, investing solely based on country of listing has become an outdated concept,” said Hose.

“We see the move as positive as the strategy gives the trust an element of differentiation in a crowded sector."