Fund of the week: Share in the wealth of a dynasty

They say a family's wealth rarely manages to survive beyond the third generation. That makes the continued success of the Rothschild dynasty(who made their first fortune in banking during the late 18th century) unusual. The good news is that retail investors can also benefit from some of their expertise in wealth preservation.

Chaired by Lord Rothschild, RIT Capital Partners plc (LSE:RCP) investment trust was first launched 20 years ago to help the family manage its investments, and is still a quarter owned by the Rothschilds. Over the past five years, it's returned 146.3% against 39.4% for the FTSE All-Share. It's also managed to gain 5.1% over the past year, despite an 18.1% drop for the benchmark.

So what's behind this success? The trust has been selling equities for the past 18 months and climbing into a range of other assets, from hedge funds and bonds to unquoted investments, such as The Economist magazine and private equity funds. By the end of March this year, almost a quarter of the entire portfolio was in bonds and cash. "This is a truly diversified portfolio," says Matthew Chambers of broker Bestinvest in The Sunday Times. Recently, the fund has also made some interesting new investments including clean technology, Brazilian farmland and Japanese property.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Investing in the trust does come with one large caveat. Strong demand means its shares are valued at an 8% premium to its underlying value. This figure has fluctuated over the past year, so wait until it drops back if you decide to buy.

Contact: 020-7493 8111

RIT Capital Partners top ten holdings