In a perfect illustration of the dangers of buying a fund on a large premium, BACIT results show that its share price fell by a penny or 0.8% from 122p to 121p over the year to the end of March 2015 – this despite the net asset value rising by 9.6% from 114p to 125p. The shares moved from a premium of 7% to a discount of 3%. The dividend (which is paid in extra shares unless you opt for cash) increased from 2p to 2.1p.
Adding in the income, the fund generated a total return of 11.5% on net assets after a 1% contribution to charity (£2.2m to cancer research and £2.2m to the BACIT foundation). The 11.5% return compares favourably with a 6% return on the MSCI World Index and 6.6% on the FTSE All-Share Index.
Within the portfolio, they added three new managers to the portfolio during the financial year: Zebedee Growth Fund, a European focussed long-short equity manager, and two macro funds, Seia Global Fund and Parity Value Fund. they also invested more money in two European holdings during the year: Maga Smaller Companies Fund, a long-short equity manager, and WyeTree European Recovery Fund, a manager of securitised mortgages. Infratil Capital II, Permira V and Pioneer Fund drew down cash as Infratil acquired Affinity Water in the Greater London area, the Calvin Capital gas and electricity metering business in the UK, and a power supply company in Sweden; Permira acquired eleven new investments and the Pioneer Fund moved to having seven of its target of 15 new drug candidates under development.
Cognisant of their ambition to protect the portfolio in down markets, the allocation to managers running hedged strategies increased from 53.3% to 61.6% during the financial year.
BACT : BACIT increasing exposure to hedged strategies