RIT Capital Partners have published their half-yearly report for 2017. You can download and read it here. The report provides a general update on their current thoughts and views, insights about existing holdings and changes to the portfolio over the period. The chairman’s statement, written by Lord Rothschild, is also worth a read (pages 2-3 of the report).

Some highlights from his letter below:

• On current valuations: “We do not believe this is an appropriate time to add to risk. Share prices have in many cases risen to unprecedented levels at a time when economic growth is by no means assured. The S&P is selling at 25x trailing 12 months’ earnings, compared to a long-term average of 15x, while the adjusted Shiller price earnings ratio is [at] approximately 30x. The period of monetary accomodation may well be coming to an end. Geopolitical problems remain widespread and are proving increasingly difficult to resolve.”
• On portfolio positioning: “We retain a moderate exposure to equity markets and have diversified our asset allocation towards equity investments where value creation is driven by some identifiable catalyst or which are exposed to longer-term positive structural trends. We have a particular interest in investments which will benefit from the impact of new technologies, and Far Eastern markets, influenced by the growing demand from Asian consumers.”
• On new technologies and their partnership with Social Capital: “As the ‘Fourth Industrial Revolution’ develops, it becomes increasingly important for [RIT] to be able to assess investment opportunities in the innovation-driven changes which are affecting almost every business sector. We will invest in a range of Social Capital’s funds to benefit from [their] data-driven approach and expertise in this area, as well as looking at specific opportunities.”