RIT Capital’s Half-Year Performance: A Concern?

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RIT Capital Partners PLC reported a decline in its net asset value per share on Tuesday, and noted that it underperformed its benchmark during the half-year.

RIT Capital is managed by J Rothschild Capital Management Ltd, and aims for long-term capital growth while preserving shareholder capital.

For the six months ended June 30, the net asset value per share decreased by 1.0% to 2,364 pence on June 30 from 2,388 pence on December 31.

Total net asset value per share return was negative 0.2%, lagging its benchmark, the MSCI All Country World Index, which was positive 11.0%. RIT Capital said that due to headwinds in the economy, it maintained a “low exposure to listed stocks” during the period.

“Many of the underlying conditions that made 2022 a particularly difficult year for markets still prevail today… In the US, UK and Europe, rates have risen significantly, with the fastest average increases in four decades. Yield curves remain inverted, which in the past has been a leading indicator of a future recession,” Chairman James Leigh-Pemberton said.

“Despite this worrisome backdrop, the S&P 500 ended the semester with a double-digit rise and the Nasdaq posted one of its strongest gains in a decade, rising nearly a third.

Total assets fell 1.7% to £4.10bn, from £4.17bn year-on-year.

RIT Capital paid a first interim dividend of 19 pence per share in April, and declared a second dividend of the same amount to be paid on October 27.

The company noted that inflation remained significantly above central bank target rates and policy rates may not yet have peaked.

“We may not yet have seen the full impact of tighter conditions on consumer demand, credit conditions, business margins, earnings and funding costs. So we don’t think the reasons for our moderate levels of listed equity exposure have changed,” said Chairman Leigh-Pemberton.

Shares of RIT Capital were down 0.5% at 1,931.08 pence in London on Tuesday morning.

This article is originally published on zonebourse.com

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