Results analysis from Kepler Trust Intelligence

Pacific Assets (PAC)

06/05/2026

Results analysis from Kepler Trust Intelligence

Pacific Assets (PAC) has released its annual results for the year ending 31/01/2026, with a NAV total return of 0% and a share price total return of 5.1% which compares to the trust's benchmark, which rose 28.6%. Despite the near-term challenges, long-term performance remains in line, with a five-year NAV return of 24.7% versus 25% for the benchmark.

Whilst there were stock selection positives in the tech sector, a low relative allocation to the sector, as well as to Korea and Taiwan, were a headwind. Equally, the high allocation to Indian stocks hurt.

During the year, there was some corporate restructuring at parent company First Sentier, which transitioned management responsibilities to another affiliate. As a result, the board launched a strategic review, considering several options for the future, with the outcome expected soon. The board received considerable interest in taking on management, including from the incumbent.

Due to the ongoing review, the management team have been limited to 20% of turnover, meaning limited additions have been made on a bottom-up basis. The trust generated revenue of 5.6p per share, and declared a dividend of 5.7p for the year, equivalent to a yield of c. 1.5%.

The discount narrowed, supported by c. 6.3m shares being bought back. These were paused following the announcement of the strategic review.

Chairman Andrew Impey focused on the long-term Asia story, noting the "favourable demographics, the continued expansion of the region's digital economy, and increasing participation in global technology and innovation supply chains"

Kepler View

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Whilst Pacific Assets (PAC) has faced its own challenges in the period, wider Asian markets have delivered on their promise in the year under review with a strong rally, supported by a number of factors. PAC's manager had identified many of these, although limited position sizes impacted relative returns. Regardless, the Asian growth story continues to be well-supported in our view.

Prior to the review, the board had introduced several strategic initiatives in the year to increase the trust's appeal. As these remain in place, we believe the discount risk remains reduced. Evidence supporting this is the consistency of the discount since the pause in share buybacks.

The outcome of the strategic review could lead to further discount narrowing. Markets dislike uncertainty, and an outcome would resolve this. Whether this be management continuation, a switch to a new team, or even a combination with a peer, each scenario could plausibly improve the trust's rating. Regardless, the region has a vast universe of attractive companies, which lends itself well to active management. With the board having received numerous proposals, whichever direction the trust's future goes, the long-term potential for the trust to capture alpha going forward is strong.

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