Personal Assets Trust Share News (PNL)

LONDON (Alliance News) - Personal Assets Trust PLC Thursday said it had underperformed its benchmark index in the first half of its financial year, reporting that net asset value per share fell 4.9% compared with a 5.8% rise in the FTSE All-Share index.

Its NAV at the end of the six months to October 31 stood at GBP334.75.

Over a three year period, the trust, which is run expressly for private investors, has seen NAV increase 10.5% compared with the 22.1% rise in the FTSE All-Share, an underperformance equivalent to 3.3% a year.

"Performance was negatively affected by weakness in index-linked bonds and gold, lacklustre performance from some stocks and the drag from holding cash in a rising market," it said.

However, it criticised central banks for their recent polices and said it would retain a holding in gold as well as taking a contrarian view on the markets overall.

"Negative real interest rates are here to stay. Beggar-my-neighbour policies, reminiscent of the 1930s, instigated by central banks to keep their currencies competitive will lead to an on-going debasement of paper currencies. The rigging of financial markets by central banks will not end well. Gold, therefore, is not a short term trade but long term portfolio insurance," it said in a statement.

"By not permitting markets to function properly, central banks are sowing the seeds of the next crisis. Try as they may, they cannot rig the markets for ever; and finding a way to escape from the unconventional policy that has prevailed since 2009 will prove challenging. Central banks are in a trap of their own making," it went on to say.

"Credibility is hard won and easily lost. Like Goethe's Sorcerer's Apprentice, central banks risk losing control of the excess liquidity, ultimately leading to currency crises and higher levels of inflation. We need to prepare for such an eventuality, even though others are partying like it's 1999," it added.

Personal Assets Trust shares were down 0.4% at 33,160 pence Thursday afternoon.

By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1

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