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Pacific Horizon Investment Trust: October 2021 update

Senior Investment Analyst Kate Marshall shares our analysis on the manager, process, culture, 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.

  • Ewan Markson-Brown recently stepped down as manager of this trust and left Baillie Gifford
  • Previous deputy manager Roderick Snell has been appointed lead manager, and retains support from a well-resourced team
  • Performance has been exceptional over the past year, helped by reducing investments in Chinese tech and adding to materials and Indian companies

How it fits in a portfolio

Pacific Horizon Investment Trust aims to grow your investment over the long term by investing in Asia Pacific markets. This includes developed Asian markets such as Hong Kong and Singapore, emerging markets like China and South Korea, 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. Investors in closed-ended funds should be aware that the trust can trade at a discount or premium to Net Asset Value (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 previously deputy manager of the Pacific Horizon Investment Trust from September 2013. He was recently appointed lead manager after Ewan Markson-Brown stepped down and left Baillie Gifford. We think Snell is the right person to take on this role, given he’s been closely involved in the trust’s management for eight years. 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 also 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. Current investments in this portion include Samsung Electronics, which has seen long-term earnings growth.
  • Pace – these are rapidly growing companies that most other investors think will grow earnings at a slower pace. This includes SEA Limited, a Singaporean consumer internet company.
  • 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, invest 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 four years ago, but more recently the investment has paid off due to increased electric vehicle demand.

Many funds with a growth-focused investment style have a bias towards sectors that are expected to deliver high levels of growth in the years to come, such as technology. This trust also invests in technology, but Snell and his team are prepared to be flexible and have changed the way the trust is invested in recent years, including a reduction in tech.

Prior to the worst of the coronavirus crisis in 2020, the managers reduced exposure to big Chinese tech companies such as Alibaba and Tencent, 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. 

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) than larger firms which adds risk. The manager sees a lot of potential in this part of the market, so the Board has proposed to increase the maximum allowed in unlisted companies from 10% to 15%. 


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.

Baillie Gifford recognises the risks posed by Environmental, Social and Governance (ESG) issues and uses its position to encourage companies to act in a sustainable way. The company has a dedicated Governance and Sustainability Team that is responsible for producing ESG research, which challenges and contributes to the investment decision-making process. They also monitor companies' progress on an ongoing basis and engage with them on ESG matters where appropriate.


The trust’s ongoing charge was 0.92% for the year ending 31 July. Investors should refer to the latest annual reports and accounts and Key Information Document for details of the risks and charging structure.

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


The trust has delivered strong long-term returns. Since Snell was appointed deputy manager in 2013, it’s grown 448.3%* in share price terms compared with 179.5% for the average trust in the AIC Asia Pacific sector. As always, past performance is not a guide to future returns.

Much of this strong performance has come over the past 18 months. The trust benefited from the  weaker performance of Chinese tech companies towards the end of 2020 after reducing exposure earlier in the year. It also benefited from adding to sectors that had previously been out of favour, including miners and materials producers. Other tech companies, such as Sea Limited, helped performance, as did increased exposure to the Indian stock market, which performed well.

We think Snell and the team have the potential to deliver good long-term returns. The trust’s performance isn’t always as strong though and the level of last year’s returns shouldn’t be expected from year to year. There will be times when its performance will look different to the broader Asian stock market, both good and bad.

Pacific Horizon - performance under Roderick Snell

Past performance isn't a guide to the future. Source: *Lipper IM to 30/09/2021.

Name % Growth % Growth % Growth % Growth % Growth
30/09/2016 To 30/09/2017 30/09/2017 To 30/09/2018 30/09/2018 To 30/09/2019 30/09/2019 To 30/09/2020 30/09/2020 To 30/09/2021
Pacific Horizon Investment Trust PLC 34.9 12.2 -4.1 85.0 51.3
AIC Investment Trust - Asia Pacific 20.1 5.8 7.4 14.4 28.9

Past performance isn't a guide to the future. Source: *Lipper IM to 30/09/2021.



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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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