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Pacific Horizon Investment Trust: November 2022 update

Lead Investment Analyst Kate Marshall shares our analysis on the manager, process, culture, ESG integration, cost and performance of the Pacific Horizon Investment Trust.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

This article is more than 6 months old

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

  • Trust manager Roderick Snell is an experienced Asian equities investor
  • He has the support of a well-resourced team at Baillie Gifford
  • While the trust has a growth focus, the manager uses a flexible investment approach and invests in some more economically sensitive businesses

How it fits in a portfolio

Pacific Horizon Investment Trust aims to grow your investment over the long term by investing in companies based in Asian markets. This includes developed Asian markets such as Hong Kong and Singapore, emerging markets like China and India, and frontier markets including Vietnam. Emerging and frontier markets are higher risk places to invest as they’re at an earlier stage of economic development, so a long-term outlook should be taken. The trust could be a way to diversify a global investment portfolio focused on growth or, due to its growth investment style, it could sit alongside other Asian trusts that use a more value-focused approach. Investors in closed-ended funds should be aware that the trust can trade at a discount or premium to NAV.


Roderick Snell is lead manager of this trust. He joined Baillie Gifford in 2006 and is an Investment Manager in the Emerging Markets Equity Team, which he joined in 2008 after spending time in the UK and European Equity Teams.

Snell was deputy manager of the Pacific Horizon Investment Trust from September 2013. He was appointed lead manager in June 2021 after Ewan Markson-Brown stepped down and left Baillie Gifford. He’s also co-managed the Ballie Gifford Pacific Fund since 2010. This is an open-ended fund managed in the same way as the investment trust, with significant overlap in the underlying investments.

Fund managers at Baillie Gifford work as part of close-knit teams, so Snell receives input, support and knowledge from a group of experienced individuals.


Snell invests in companies with high growth potential that he thinks could be capable of delivering exceptional returns over the long run. He believes that companies with sustainable, long-term growth potential are often underappreciated by investors that take a shorter-term view. Instead, he’s prepared to be patient, and wait for a company’s full growth potential to be reflected in a hopefully rising share price, even if that takes time.

The manager looks for underappreciated growth in three forms:

Duration – these are world-class companies with a competitive advantage and great management. They are held for a long time because their growth is expected to endure.

Pace – these are rapidly growing companies that most other investors think will grow earnings at a slower pace.

Surprise – these are companies that may be out of favour or are growing earnings slowly, which later reach an ‘inflection point’ and perform strongly. Snell aims to invest in these businesses before other investors get excited and push up their share prices. Vale Indonesia sits in this portion of the trust. As a nickel producer, the team felt it would benefit from electric vehicle growth. They invested five years ago and, while it took time, recent strong performance means the manager’s patience eventually paid off.

The managers have been active in changing where the trust is invested in recent years. In 2020, they reduced exposure to big Chinese tech companies, believing competition was getting fiercer. They rotated into areas that are traditionally seen as more sensitive to the health of the economy, such as materials, including copper and nickel producers, and industrials. They also added to investments in India.

However, Snell has recently been adding to investments in China. China’s market has fallen this year, due to concerns around its property market, continued lockdowns due to its zero-Covid policy, and more recently president Xi Jinping’s appointment of loyalists to his leadership team. Following share price falls, the manager has taken advantage of the value on offer and added Chinese tech companies Alibaba, Meituan and Baidu.com.

Snell has also increased investments in Indonesia, believing the country’s economic backdrop is improving. Two Indonesian banks have been added to the trust. On the other hand, after performing well, he’s reduced investments in India, though the country still makes up around a quarter of the trust.

The trust can invest in companies of all sizes, including higher-risk smaller companies. It also invests in some companies that are yet to be listed on a stock market. These are often younger companies with exciting growth potential but are less liquid (more difficult to quickly buy and sell) and riskier than larger firms. 7% of the trust is currently invested across two unlisted companies – ByteDance, which owns online content platform TikTok, and Daily Hunt, which has a similar platform to TikTok in India. Up to 15% of the trust can be invested in unlisted companies.

While the trust doesn’t currently use gearing (borrowing to invest), it has the ability to do so and increases risk when used.


Baillie Gifford is an independent private partnership founded in 1908. It's owned by partners who work full time at the firm. This ownership structure means senior managers have a vested interest in the company, and its funds, performing well. We think this has helped cultivate a culture with a long-term focus, where investors' interests are at the centre of decision making. We also like that fund managers are incentivised in a way that aligns their interests with those of long-term investors and should retain talented managers.

ESG integration

All of Baillie Gifford’s funds and trusts are run with the long-term in mind – they see themselves as long-term owners of a business, not short-term renters. So, assessing whether society will support, or at the very least, tolerate, the business model over the long term, and whether management will act as good stewards of shareholders’ capital is an important part of the investment process. Dedicated ESG (Environmental, Social and Governance) analysts sit with and report into their respective investment teams, and the firm’s ESG efforts are supported by a dedicated climate specialist team, an ESG Services team (responsible for voting operations and ESG data) and an ESG Client team (responsible for ESG-related client communications).

Individual investment teams are responsible for voting and engagement for the companies they invest in. Investment in controversial weapons is prohibited across the firm.


The trust's ongoing charge is 0.74% as of 31 July 2022, the end of the trust’s financial year. Investors should refer to the latest annual reports and accounts and Key Investor Information for details of the risks and charging structure.

If held in a SIPP or ISA the HL platform fee of 0.45% (capped at £200 p.a. for a SIPP and £45 for an ISA) per annum also applies. Our platform fee doesn’t apply if held in a Fund and Share Account.

As investment trusts trade like shares, both a buy and sell instruction will be subject to the HL share dealing charges within any Hargreaves Lansdown account.


The trust has delivered strong long-term returns. Since Snell was appointed deputy manager in 2013, it’s grown 250.71%* in share price terms compared with 120.90% for the average trust in the AIC Asia Pacific sector. As always, past performance is not a guide to future returns.

While the trust performed strongly last year, it has struggled so far in 2022. The manager’s growth style of investing has been out of favour this year and acted as a drag on returns. In particular, an investment in Sea Limited, a Singaporean consumer internet company, has been weak. Negative sentiment towards the region has also seen the trust move from trading on a premium to a discount throughout the year. At the time of writing the trust trades on a discount of 7.48%.

On the other hand, some of the more economically sensitive companies, as well as Indian companies including online delivery business Delhivery, have contributed positively to performance.

After a tough year for Asian markets, Snell is now more enthusiastic in his outlook for the region. He notes that most countries are in a stronger financial position compared with previous crises and periods of turmoil. He believes Asia will remain a fast growing region, while many companies are delivering stronger earnings growth than those in the West. Further market volatility should not be ruled out though.

Annual percentage growth
Oct 17 – Oct 18 Oct 18 – Oct 19 Oct 19 – Oct 20 Oct 20 – Oct 21 Oct 21 – Oct 22
Pacific Horizon Investment Trust PLC -3.95% 5.82% 102.99% 43.22% -41.43%
AIC Investment Trust - Asia Pacific -5.98% 14.24% 23.11% 20.56% -23.30%

Past performance is not a guide to the future. Source: *Lipper IM to 31/10/2022


VIEW Pacific Horizon Investment Trust PLC KEY INFORMATION DOCUMENT

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    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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