RIT Capital Partners preserves wealth

The trust invests without the constraints of a benchmark, looking to deliver increases in capital value in excess of relevant indices over time, such as MSCI World, FTSE All-Share and the Investment Trust Net Asset Index. This has helped it maintain a strong long-term performance record in absolute terms. Although its net asset value (NAV) fell in 2008, it outperformed the MSCI World as well as FTSE All-Share, which fell by nearly 33 per cent that year, by quite some margin.

The trust invests in a range of asset classes including unquoted investments, a recent example being North Sea exploration company Agora. Unquoted investments accounted for more than 23 per cent of assets at the end of September.

The trust trades currencies actively because its investment committee believes they are an important element of returns, as well as being liquid and cheap to trade. Currently it is biased towards countries with strong balance sheets and economic growth, largely in Asia and resource-rich countries.

The trust outsources management of some of the portfolio, which RIT says ensures access to the best talent available, although the trust's investment committee decides the asset allocation.

RIT Capital levies a performance fee when the increase in the value of the funds exceeds specified hurdles. Management fees are based on a percentage of the funds under management in the range of 0.5 per cent to 1.5 per cent a year.

The trust trades on a premium to NAV. This is not unusual; the high number of private investors on its shareholder register mean it has previously traded at significant premiums to NAV for prolonged periods of time.

Source: Investors Chronicle & *Morningstar.

Performance data as at 1 December 2010.

TOP 10 HOLDINGS as at 31 March 2010

Asset allocation