RIT Capital: we have never been more active

RIT Capital has begun to turnaround a wobbly period of performance to report an increase in assets above £2 billion for the first time at the end of February, or a record £13.09p per share.

The turnaround came as incoming lead manager Ron Tabbouche (pictured above), who took over from former head Micky Breuer-Weill in September, ramped equity exposure and dropped defensive hedges.

Increased risk appetite allowed the fund to capture 6% during the January equity rally. Over the three years to the end of February the portfolio has returned 19.14% versus 33.70% on the FTSE World TR.

Shares in the trust have lagged the portfolio performance however, and after trading at a significant premium for much of the last five years have dropped to a 12% discount, the lowest since the end of 2008. 

The defensive positioning, in addition to the company’s gold holdings, caused its NAV to fall 4.9% over the six months to the end of September, versus a 0.6% decline in the MSCI World TR Index.

Tabbouche has increased equity exposure from 51% to 61% over the last six months and overall market exposure from 90% to 101%.

‘The existential risk appears to have reduced,’ said company chair Lord Rothschild.

‘This has allowed us to look beyond "risk on/risk off" to more fundamentally driven situations and identify investments which are attractively valued.

‘A global recovery largely built on printing money cannot be riskless. Yet you can see from this brief summary above that your company has rarely been more active in repositioning itself.’

The fund has also moved to consolidate smaller positions in the fund and move to a greater level of conviction. At the end of the year US assets stood at 48% and dollar-denominated assets at 62%.