The best bond and capital preservation funds
Dave Baxter, Investors Chronicle, September 12, 2024:
Stock markets have been riding pretty high in the past year, and in times like that it’s easy to forget the need for protection when things go wrong..
We stick with two names from the four, one of which makes good use of bonds and one of which is more esoteric.
Ruffer (RICA)
Never short of a good turn of phrase, the Ruffer team recently noted that it seeks to “increase the portfolio’s protective armoury when we sense moments of danger”..
RIT Capital (RCP)
Two of the other wealth preservation trusts, Capital Gearing (CGT) and Personal Assets Trust (PNL), tend to have some obvious overlap with Ruffer, including their use of bonds as a form of protection. But RIT Capital, which tends to be grouped in the same cohort, is a very different beast..
In theory, this is a racier option than the other three names we have mentioned, and RIT shareholders have had a very rough few years. They took a loss of 21.5 per cent in 2022, took a further 9.6 per cent loss last year and are slightly down for 2024 so far.
Where, then, is the hope? Our specialist panellists were keen to add RIT to the list last year, on the basis that its share price discount (of 20 per cent at the time) looked especially wide, and that the portfolio should come good over time.
Fast forward a year, and the discount is even wider, at around 28 per cent, and our panel maintains faith in the fund..
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