6th Mar 2014 12:56
LONDON (Alliance News) - RIT Capital Partners PLC Thursday reported an 18.6% net asset value total return in 2013, after continuing its focus on the US and Japan, investing in the technology sector, and taking an active approach to currency exposure.
The trust, chaired by Lord Rothschild, reported an increase in net asset value per share to 1,191 pence from 1,384 pence over the year, as net assets increased by GBP343 million before dividends and buybacks of GBP44 million to GBP2.15 billion.
RIT shares were Thursday afternoon quoted at 1,296.00 pence, up 0.6%.
Lord Rothschild said the trust had actively managed its currency exposure, initially reducing exposure to sterling and capitalising on its weakness, before upping exposure when spotting early signs of UK economic recovery.
Reporting a GBP341.5 million pretax profit, compared to a GBP45.3 million pretax loss in 2012, the trust avoided the fallout that struck emerging market currencies in the aftermath of US central bank tapering by holding most of its non-sterling exposure in the dollar.
RIT, which invests in areas such as distressed debt as well as equities, said its external funds performed strongly as it consolidated its relationships into a reduced number of money managers, while its direct private investment portfolio and the externally managed private funds gave modest financial returns during the year.
But Rothschild said the falling price of gold detracted from the trust's performance as a result of its investments in gold and gold miners, but he noted the improvement in the sector in 2014.
The chairman said the market's vulnerability to shocks is greater now as a result of higher valuations, implying lower margins of safety.
"With the world recovery still fragile and reliant to a large extent on policy support, it is not hard to envisage markets having to deal with such shocks in the coming year, and indeed they were felt during January," Rothschild said.
"Early in 2014 investors have become increasingly concerned on a number of fronts: these include signs of a slow-down in the Chinese economy, emerging market turmoil in response to the timing of the Federal Reserve's tapering, doubts as to whether 'Abenomics' in Japan will succeed, disappointing recent US economic data and the risk of deflation, and economic stagnation in Europe," Rothschild said.
He said the trust intends will increase its dividend by 5% to 29.4 pence.
By Samuel Agini; [email protected]; @samuelagini
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