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.
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In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
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by Gavin Lumsden on Dec 08, 2016 at 10:33