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Pacific Horizon Investment Trust: October 2023 Update

In this update, Investment Analyst Henry Ince shares our analysis on the manager, process, culture, ESG, 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.

  • This trust invests in public and private Asian companies with ambitious growth potential
  • Investments in China have grown significantly over the past eighteen months
  • Roderick Snell has built a strong track record investing in Asian markets

How it fits in a portfolio

The Pacific Horizon Investment Trust seeks to invest in what the managers believe to be the fastest growing companies in Asia (excluding Japan). 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.


Roderick Snell has been lead manager of this trust since July 2021 and has served as deputy since 2013. He joined Baillie Gifford as a graduate in 2006 and spent time with the UK and European equity teams before joining the Emerging Markets team in 2008. Snell is also responsible for managing several other funds and trusts with significant overlap in terms of process, team, and the underlying investments.

Ben Durrant was appointed deputy manager in January 2023 but has co-managed funds with Snell since 2021. He joined Baillie Gifford in 2017 and has experience across the UK, global smaller and private companies’ teams. Unlike most fund managers at the firm, Durrant didn’t join as a graduate and previously worked at RBS across a number of divisions.

Fund managers at Baillie Gifford work as part of close-knit teams, so they receive input, support and knowledge from a group of experienced individuals. The managers also benefit from the wider resource available at Baillie Gifford which consists of over 100 investment professionals.


The managers invest in companies with high growth potential that they believe could be capable of delivering exceptional returns over the long run. They think that companies with sustainable, long-term growth prospects are often underappreciated by investors that take a shorter-term view. Instead, they are 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 managers look 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. They aim to invest in these businesses before other investors get excited and push up their share prices.

This whittles their universe down to a final portfolio of between 40-120 – currently they invest in around 70. Their ‘bottom-up’ approach means this trust can look quite different to its benchmark and the managers are not afraid to make significant changes when they see fit. For example, over the past five years (to end of July 2023) investments in India have grown from 8.4% to 23.9% of the portfolio, in contrast, technology investments have fallen from just under 50% to 22% of its assets.

Over the last financial year, the managers purchased six new companies and China was at the forefront of their investment activity. The managers believe recent economic and geopolitical headwinds have provided a good opportunity to invest at attractive valuations. For example, they’ve topped up existing holdings like Alibaba Group and JD.com and made a new investment in chip designer, Silergy to the portfolio. This takes their China weighing to 34% from 17% from 18 months ago.

Vietnam is another country where the managers see opportunity with two new investments being made in mobile world and informational technology firm, FPT.

To make way for these purchases they sold nineteen companies including two Indonesian nickel companies following growing concerns about the outlook for this market. In India, they sold Zomato, the food delivery company alongside Star Health & Allied Insurance Co. Several of their smaller investments in South Korea also exited the portfolio. 

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. At the end of the latest financial year, 5.1% of the trust was invested across five private companies. 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 – including Roderick Snell. 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 are run with a long-term investment horizon 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 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 firm reports all its voting decisions and provides rationale in situations where it voted against management or abstained, in a detailed quarterly voting report. There is also a quarterly engagement report which details the companies engaged with, and the topic discussed, and further engagement case studies are available on the website. All this information is brought together in the firm’s annual Stewardship Activities report.


The trust's ongoing annual charge in the year to July 2023 was 0.72%, down from 0.74% in 2022. 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% (capped at £200 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.


Since becoming manager of the trust in September 2013, Roderick Snell has delivered strong returns for shareholders. Over this period, the trust’s net asset value (NAV) has grown by 257.07%*. The share price has also risen by 268.40%, versus 139.16% for the AIC Asia Pacific sector average and 87.46% for their selected benchmark. As always, past performance is not a guide to future returns.

Over the trust’s latest financial year (to end of July 2023), the NAV fell by 3.49%, underperforming their benchmark and the AIC sector average return of -1.11%. The share price also fell by 8.91%. The trust’s underperformance was driven by several of their largest investments coming under pressure. For example, Singaporean oil and gas company, Jadestone Energy faced operational challenges from one of its major assets in Australia. Other material detractors from performance included Indian logistics company Delhivery and Chinese technology firm JD.com.

It wasn’t all bad news though with several holdings delivering significant returns such as Indian companies Ramkrishna Forgings and Skipper, the industrial firm, whose share prices grew 189% and 213% respectively over this period.

You should consider annual performance in the context of a longer time horizon and not in isolation. The manager’s long-term approach and growth style bias means performance can be volatile and look very different to the benchmark.

Remember all investments fall as well as rise in value, so investors could get back less than they invest. Investors in closed-ended funds should be aware the trust can trade at a discount or premium to the net asset value (NAV). The trust currently trades at a discount of 11.26%.

Annual percentage growth
Sept 18 – Sept 19 Sept 19 – Sept 20 Sept 20 – Sept 21 Sept 21 – Sept 22 Sept 22 – Sept 23
Pacific Horizon Investment Trust -4.14% 84.96% 51.27% -32.84% -6.80%
AIC Investment Trust Asia Pacific 7.40% 14.45% 28.89% -16.54% -1.77%

Past performance is not a guide to the future. Source: *Lipper IM to 30/09/2023

Find out more about Pacific Horizon Investment Trust, including charges

View Pacific Horizon Investment Trust Key Investor Information

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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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