View the article online at http://citywire.co.uk/money/article/a637902
Underperforming RIT takes 'active steps' to fight back
RIT Capital has added to its gold holdings, while Lord Rothschild pledges the investment trust will stick to investment fundamentals.
Lord Rothschild, chairman of the popular RIT Capital investment trust , says ‘active steps’ have been taken to counter a disappointing six months for investors, adding that the management team will stick to investment fundamentals.
The £1.84 billion fund saw its net asset value (NAV) fall 4.9% over the six months to the end of September. With re-invested income this stood at -2.6%, still well below the 0.6% MSCI World Total Return Index.
Today's half year results cover a period of transition for the fund, with former head Micky Breuer-Weil stepping down in September, replaced by Ron Tabbouche, former head of investment at GAM.
‘Some half of the decline was accounted for by some of our defensive hedges moving against us in a rising market,’ wrote Rothschild (pictured above).
‘The other negative factor was underperformance by a few externally managed portfolios. We have taken active steps to address this.
‘We take the view that your company is unlikely to be successful in playing the game of "risk-on/risk-off" investing, or of making tactical shifts in our portfolio to catch the moves that have been such a feature of recent months.
‘If this means we lag temporary spikes in the market, so be it. It is a necessary, and we trust rare, cost of protecting your capital.’
The trust's gold holdings have been increased in response to loose monetary policy. Exposure to US-based tech stocks has also grown, while Rothschild said the portfolio remained focused on cash rich global mega-caps.
News sponsored by:
After Boris announced he was backing Brexit, sterling suffered its biggest slump in six years. Our Market Mavens discuss. Follow the Market Mavens LinkedIn page for weekly videos, in which our panel of industry experts share their views on financial news
More about this:
Look up the investment trusts
Look up the fund managers
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.