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What the wealth preservation investment trusts are telling us

Biotech trust Trump benefit may be shortlived

What the wealth preservation investment trusts are telling us

The best wealth preservation trusts and how they can help you
Investors’ Chronicle, February 16, 2021 By Mary McDougall

There’s a lot to learn from wealth preservation investment trusts, which broadly aim to protect and grow assets in real terms over time. After all, shouldn’t that be what all of us, ultimately, aim to achieve?..

There are four investment trusts that stand out as wealth preservers: Personal Assets Trust (PNL), Capital Gearing Trust (CGT) and RIT Capital Partners (RCP), which are in the IC Top 100 Funds list, and Ruffer Investment Company (RICA) – the youngest of the four, established in 2004.

In their latest commentaries, all of these trusts’ managers strike a cautionary tone…

How do they compare? 

These trusts take different approaches to wealth preservation. The two most similar in terms of performance have been Personal Assets and Capital Gearing…

Ruffer Investment Company, which was launched to allow private investors who weren’t clients of the wealth manager which runs it to get access to its process, has been the laggard in terms of performance…

RIT Capital Partners, meanwhile, is a different beast from the others, and has had better returns over the long term albeit with higher volatility…

Which ones look best? 

With wealth preservation funds, measuring volatility is as important if not more important than assessing their total returns…

While RIT Capital Partners does not always succeed in not losing money in any given year, it has served its long-term investors very well. James Carthew, head of investment company research at QuotedData, says that the Rothschild family connections give it access to some of the world’s best managers.

Carthew says: “The thinking is genuinely long term and it is creative about the way that it manages money. I think it is fair to say that it is not well understood by many investors and that is maybe why its discount is relatively volatile.” The trust was trading at a 6.1 per cent discount to NAV on 12 February, comfortably wider than its long-run average, looking like an attractive entry point.

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