A couple of years ago I suggested that you consider investing in Bacit. It’s an investment trust that operates as a cheap fund of very good (and often hedge) funds with a charitable twist (it’s cheap because the underlying managers offer their usually overpriced services for free) – a bid to win the “battle against cancer” that’s the ‘BAC’ in the name of the trust.
I followed up here on their issue of new shares, but I saw the management team again yesterday, and I just want to give those of you who invested (as I did) a quick update.
The performance has been pretty much as the managers hoped. They said they were planning for low double-digit annual growth, and, since inception in October 2012, that is exactly what they have delivered in net asset value terms: the total return has been 30.2%, and the annualised return 11.5%.
They wanted the portfolio to be resilient, and it has been: in the 29 months since the launch, the MSCI World index has had eight ‘down’ months. In each of those months, Bacit has outperformed the market. If you add them all up, Bacit made a net gain of 3.6% over all of them (the MSCI lost 17.5% over them).
The fund is 97% invested (although, of course, many of the underlying funds hold cash) and is pleasantly skewed in directions we approve of – the largest holding is the Polar Capital Japan Alpha Fund, and 35% of the overall assets are invested in Europe.
The shares are currently trading at a 2% discount to their net asset value, having been at something of a premium (over 7% at one point). This fund isn’t in our official investment trust portfolio but I suspect next time we chuck one out it will be high up on our list of candidates to fill the gap.