The RIT Capital Partners fund usually trades at a premium, but back in January it stood at a 7 per cent discount to net asset value (NAV), which seemed a , as the fund has consistently outperformed over longer periods.
While RIT Capital Partners' long-term outperformance record remains intact, the fund has not had a good time over the past 12 months, underperforming its sector and the FTSE World ex UK index over six and 12 months. Perhaps a reflection of this is the fact it is still running at a discount to NAV, of 4.7 per cent.
For investors persuaded by its long-term record, RIT continues to present a good buying opportunity, however, it should be noted that over three and five years it is not the best-performing global growth investment trust, although it does fall among the the top-10 in its sub sector.
That said, the fund has stuck to it stated objective of delivering long-term capital growth, and increases in capital value in excess of the relevant indices - over time. Emphasis is also placed on preserving shareholders' capital along the same lines as a family office, rather than beating its sector.
| Fund | Tipped at | On | Price now | Gain |
|---|---|---|---|---|
| RIT Capital Partners | 906p | 30 Jan 2009 | 996 | 7% |
Another good reason to invest in RIT Capital Partners while it is still on a discount, is its exposure to private equity, which not all global growth funds have. Unquoted investments accounted for around a quarter of RIT's portfolio at the end of September.
Analysts at WINS Investment Trusts say that over the years, the trust's unquoted investments have been a significant driver of returns. In addition, investment experts and peers such as Foreign & Colonial Investment Trust argue that 2009 and 2010 could prove to be vintage years for private equity investments.
But in the short term, private equity can be a drag on performance until the investments start to bear fruit, while write-downs can lead to some additional volatility. Two write-downs detracted from RIT Capital's performance in its last financial year.
Key fund data:
| RIT CAPITAL PARTNERS (RCP) | |||
|---|---|---|---|
| PRICE | 996.5p | ||
| SIZE OF FUND | £1.5bn* | TOTAL EXPENSE RATIO | 1.35% (Lipper) |
| SET UP DATE | 15/06/1988* | 12 MTH YIELD | 0.72% |
| NET ASSET VALUE | £1046m | GEARING | 117%** |
| PRICE DISCOUNT TO NAV | 4.7%** | 3 YR BETA | 0.34 |
| PERFORMANCE YTD | 13.71% | MORE DETAILS | www.ritcap.co.uk |
Source: Morningstar, *RIT Capital Partners, **WINS as of 15 December.
