Protect your wealth with RIT Capital Partners

This investment trust, which we count among our IC Top 100 Funds, was set up to manage the personal wealth of the Rothschild family. The Rothschilds hold 21 per cent of its shares and the trust's chairman is Lord Rothschild. RIT Capital Partners takes a strong wealth preservation approach, aiming to protect capital when markets are falling and generate growth over the long term.

The trust is among the top performers in the Association of Investment Companies (AIC) flexible investment sector over one year and three years. Over the past 10 years it has returned 89.4 per cent for its investors, compared with the 60.2 per cent delivered by the FTSE All-Share. This solid performance reflects the trust's ability to perform relatively well even in bad years such as 2008, when its share price fell 14.2 per cent compared with the FTSE All-Share's fall of nearly 30 per cent.

This trust is also among a small number of investment trusts consistently recommended by DIY investment platforms and data providers.

Due to its strong record RIT Capital Partners had been trading at a premium to net asset value (NAV), but has moved to a discount of 3.4 per cent amid the Brexit fallout - compared with its 12-month average premium of 3 per cent - making now a good time to pick up the trust to benefit from its previous ability at protecting in falling markets.

Analysts at Hargreaves Lansdown say: "We like the pragmatic approach used by [investment director] Ron Tabbouche and the well-resourced team at RIT Capital Partners. Aiming to shelter some capital during market falls means there is less ground to make up when they rise again. Over the long term, aiming to capture the majority of market gains while sheltering on the downside can add up to attractive returns."

The trust takes a multi-asset approach, investing in both quoted and unquoted companies, as well as across multiple asset classes, geographies, industries and currencies. It is one of only a small number of international equity trusts in the UK to actively hedge currency. Its May 2016 fact sheet shows a 49 per cent currency exposure to the US dollar and 40 per cent exposure to Sterling. At times of heightened risk the management team keeps its exposure to quoted equity markets at moderate levels.

Maike Currie, investment director for personal investing at Fidelity International, suggests multi-asset funds like RIT Capital Partners are a good way of diversifying portfolios in the current choppy market conditions. "In uncertain times, wealth preservation is key," she says. "And there are few investors who have been better at preserving wealth than the Rothschild family.

"In an environment that is likely to continue to be punctuated by market and political uncertainty, your best defence is to diversify. An effective way to achieve this is via a multi-asset fund, which aims to smooth returns by combining a range of different assets."

RIT Capital Partners has the highest ongoing charge in the AIC Flexible Investment sector, at 1.34 per cent. However, the trust has proved its ability to preserve wealth in different market conditions, and grow its share price and assets over the long term, meaning you are being compensated for this charge. So, if you're looking to protect your capital during these volatile times, adding RIT Capital Partners - especially at its current discount - could be a smart move. Buy. EA

Source: Morningstar and Winterflood Securities, as at 28/06/16

Performance

Source: Morningstar as at 28/06/16

Geographical exposure as at 31 May 2016 (%)

Source: RIT Capital Partners

Asset Allocation as at 31 May 2016 (%)

Source: RIT Capital Partners

IC Tip Rating