RIT Capital has promised to take ‘active steps’ to counter a disappointing six months for the company, adding to its gold holdings but adding it sees no value in chasing yield up the risk curve.
The £1.84 billion fund saw its 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.
The results come in 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 chair Lord Rothschild.
‘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.’
On addition to increasing gold holdings on loose monetary policy, the fund upped its exposure US-based tech stocks over the period, and said it remained focused on cash rich global mega-caps.