Over the six months to the end of June 2016, RIT Capital Partners returned 3.6% in NAV terms. A reduction in the premium from 6.9% to 2.0% meant that the share price return was negative, -1.2%. RPI+3% per annum worked out as 2.5% for the period and the return on the MSCI AC World Index was 6.1%. Following the first interim dividend of 15.5 pence paid in April, we have declared a second interim dividend of the same amount. This will be paid on 28 October, providing shareholders with a total dividend of 31 pence, a 3.3% increase over 2015.
They reduced RIT Capital Partners’ quoted equity exposure from 55% to 44%. Sterling exposure was significantly reduced over the period to 34%, and currently stands at approximately 25%. They increased gold and precious metals to 8% by the end of June. They also increased the allocation to absolute return and credit, which delivered positive returns over the period, benefiting from a number of special situations. Within this category their new association with Eisler Capital had an encouraging start. They expect this part of the portfolio to be an increasingly important contributor to overall returns.
On currencies, they reduced our exposure to Sterling in anticipation of Brexit and the generally unsettled UK political environment. The significant US Dollar position has now been somewhat reduced as, following the Dollar’s rise, they saw interesting opportunities in other currencies as well as gold, the latter reflecting their concerns about monetary policy and ever declining real yields.
RCP : RIT Capital ups focus on gold, credit and absolute returns