RIT Capital Partners (LSE: RCP), one of the components of the MoneyWeek investment trust portfolio, saw a significant narrowing in its discount, the difference between its share price and net asset value (NAV) in March.
As of 31 March, at a NAV per share of 2,673 pence, the fund traded at a discount of 4.6%; much lower than February when it traded at a discount of 8.4%.
RIT Capital Partners usually outperforms both its benchmarks over the long-run, but this trend has been in decline over the past few months.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely 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
RIT’s two benchmarks – CPI plus 3% and the MSCI All Country World Index (50% sterling) – were up 2.5% and down 3.7% respectively.
RIT’s strategy is typically a long-term one, and it does not aim to beat its benchmarks over short-term periods. “Instead it tries to show strength when stockmarkets are weaker and provide modest growth over the long term,” Hargreaves analyst Tom Mills wrote last year.
For the most part, the trust has traded at a premium over the last five years. However, it moved to a discount in the “turbulent market conditions of Q1 2020” and it has yet to regain a premium rating, says William Heathcoat Amory, head of Kepler Partners’ investment trust research team.
But Amory thinks that uncertain market conditions could bolster investor risk appetite and benefit the trust: “If uncertain market conditions remain, investors’ appetites may return to more defensive strategies… and the current discount could revert to a premium (the average for the past five years is a premium of 2.2%),” he says.
RIT Capital Partners, which was formerly known as Rothschild Investment Trust, is a UK-based investment trust that specialises in investing in quoted securities and quoted special situations.
The trust listed on the London Stock Exchange in 1988, and the trust is managed by J.Rothschild Capital Management. The fund’s managers invest in a wide range of different securities, equity and bonds funds, real estate, currencies, precious metals, to name a few.
-
Is a mortgage in retirement always a bad idea?A mystery shopper exercise shows high street lenders are “shunning” retirees looking to take out a mortgage. Are they right to do so?
-
Three funds to consider as UK small caps trade at 30% discountUK small caps have been unloved for some time, but a shifting economic environment could give them a boost
-
Ashoka: A new, but reliable, trust you can count onOur investment columnist, Max King, says tough times breed investment trusts like Ashoka, that you can trust.
-
10 dirt-cheap Reits to buy nowTips Real estate investment trusts (Reits) are out of favour due to rising interest rates and fear of weak demand. The sell-off has been so indiscriminate that many now offer compelling value, says Rupert Hargreaves.
-
7 infrastructure investment trusts for income and growthTips These alternative investment trusts with international exposure could provide investors with an attractive income stream as well as capital growth, says Max King
-
11 investment trusts for inflationary timesTips Inflation eats away at the value of your money, but these investment trusts can help you grow your wealth.
-
The MoneyWeek portfolio of investment trusts – March 2023 updateTips A decade ago we set up the MoneyWeek portfolio of investment trusts. It proved a success, says Andrew Van Sickle.
-
Green shoots for global markets in 2023?Advertisement Feature There are many risks for the global economy in 2023, but there are also encouraging signs. Asia is benefitting from the reopening of China and improving investor confidence. Reliable cash flow and dividends are likely to be highly valued by investors this year
-
18 investment trusts for income investorsTips The Association of Investment Companies’ Dividend Heroes list highlights 18 trusts that have increased their dividends over the last 20 years, eight of which have done so for half a century
-
Should you stick with Mid Wynd investment trust?Tips Max King looks at the prospects for Mid Wynd as the trust prepares to say goodbye to Simon Edelsten and Alex Illingworth, managers of the trust since 2014.
