(Alliance News) - Pacific Horizon Investment Trust PLC said Tuesday it underperformed against its comparative index in its recently ended financial year, due to macro-economic headwinds affecting growth stocks.
For the year to the end of July, the Asia-Pacific-focused investment trust reported a net asset value negative return of 1.9%, compared to the MSCI All Country Asia ex Japan Index in sterling terms, which made a 4.2% positive return.
Net asset value per share as at July 31 was 344.50 pence, down from 351.26p the same date the year before.
Pacific Horizon's share price at the end of July was 320.00p, reflecting a 7.1% discount to net asset value.
Shares in the investment trust were down marginally on Tuesday at 312.45 pence, having declined further since the year-end.
Pacific Horizon said most of its net asset value decrease took place in the first half of the year, as the share price of many of the trust's holdings were hit by a crunch in liquidity and global trade wars.
In particular, Pacific Horizon's largest holding, Sunny Optical Technology's share price fell by 60% over the year as its competitive advantage in China was erased by new algorithms reducing the need for precision lenses in smartphone cameras.
Other holdings such as Tencent Holdings Ltd and Baidu saw pressure from online advertising from new competitors such as TikTok, which grew to having 40% of China's media advertising budget from 2% over a four-year span.
"There are currently an increasing number of global political, social and economic issues to worry investors, but there are also a large number of companies in our universe that continue to grow successfully and can be bought at reasonable valuations," said Chair Jean Matterson.
"The most pertinent issue for our markets is the disagreement between the US and China regarding tariffs on goods in and out of the region. China is not giving in and is now using the renminbi exchange rate to offset some of the rising costs to Chinese exporters," Matterson added.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Pacific Horizon (PHI)