4th Aug 2020 10:46
(Alliance News) - RIT Capital Partners PLC said Tuesday its net asset value slipped slightly in the first half of 2020, against the challenging market background caused by the Covid-19 pandemic and the resulting lockdowns.
For the six months to the end of June, the Rothschild-managed investment trust reported a net asset value return of negative 2.1%. In comparison, the Retail Price Index plus 3.0% per annum gained 2.0% while the MSCI All Country World Index lost 2.8%.
As at June 30, RIT Capital's net asset value per share stood at 1,944 pence, down 0.7% from 1,958p on the same date a year before, and 3.0% lower from 2,004p at the end of December.
Meanwhile, total net assets remained flat at GBP3.05 billion.
RIT's share price at the end of June was 2,085 pence, reflecting a premium to net asset value of 6.5%.
Shares in RIT Capital Partners were down 0.7% on the day Tuesday in London at 1,763.39 pence.
The trust said that headwinds during the period were "concentrated in quoted equity funds and stocks that were more sensitive to the economic cycle and suffered as a result of the pandemic, across both developed and emerging markets".
Fixed-rate loan notes also experienced a mark-to-market accounting loss as rates declined.
The trust declared an interim dividend of 17.5 pence per share, up 2.9% from 17.0p the same period the year before.
"In our view the current level of market optimism, buoyed by the scale of policy response and benign views on the pandemic's future impact leaves investors with little margin of safety. To justify the current backdrop of record debt levels and valuations, there needs to be a sustained period of economic growth. There are many reasons to doubt that this will occur, not least a frugal private sector, uncertainty around inflation and rising geopolitical and societal tensions. We are therefore retaining our cautious portfolio stance, with moderate quoted equity exposure complemented by other diversified and often uncorrelated sources of return," said Francesco Goedhuis, chair & chief executive officer of manager J Rothschild Capital Management Ltd.
By Dayo Laniyan; [email protected]
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