Fidelity has removed RIT Capital Partners (RCP ) from its blacklist of investment trusts in the first sign of the positive impact cost disclosure reform could have on the beleaguered closed-end fund sector.

Shares in the Rothschild family-backed trust, which languish on a 34% discount over concerns about performance, private equity exposure and high costs, jumped 50p, or 2.9%, to £17.80 at Fidelity International’s decision to remove trading restrictions.

‘We are delighted that Fidelity has reinstated RIT Capital Partners plc on its platform. This means that new buyers can once again buy RIT shares via Fidelity,’ said a spokesperson for the £2.5bn global multi-asset fund.

The significance of Fidelity’s U-turn – 15 months after it suspended RIT – is marked by more than just the return of investors to the stock, however.

Last month’s surprise decision by the government and the Financial Conduct Authority to axe controversial cost disclosure rules means investment companies no longer have to publish key key information documents (KID) that made many funds investing in ‘alternative’ assets look expensive.

Under the FCA’s new ‘forbearance’ policy, and following contact with the Association of Investment Companies and other funds and platforms, RIT has revised its KID.

This now shows zero costs reducing investors’ potential returns whereas previously it showed a ‘reduction in yield’ of 3.8% which discouraged private investors and wealth managers alike. While the reforms have been widely welcomed, the platforms have expressed unease at reporting a zero figure without a clear explanation.

In line with the AIC’s new approach, RIT’s document explains that the company’s operating expenses last year led to an ongoing charges figure (OCF) of 0.77% of net assets. It says that ‘for the avoidance of doubt, the OCF is not an additional cost paid by shareholders to the company’.

This is an important advance for RIT, whose use of third-party fund managers to access private equity, credit and other specialist asset classes was regarded as costly, even if justified on investment grounds. 

Under Maggie Fanari, the new chief executive of its fund manager J Rothschild Capital Management (JRCM), RIT has become more transparent. As of this month, its factsheet and website now provide more information about investments in quoted equities, private investments and uncorrelated strategies, as well as weightings to subsectors, regions and currencies.

In February’s annual results, chair James Leigh-Pemberton said JRCM would lower the allocation to private companies to between a quarter and a third over the next two years. The weighting currently stands at 32%, having sat at 40% when Fidelity added the trust to the restricted list.

RIT hopes the improved disclosures will help the shares start to recover from their slump from a £27.50 peak at the end of 2021. The wide share price discount has persisted despite the board repurchasing over 7% of RIT’s shares since January last year, one of the biggest share buybacks the sector has seen.  

This is also despite an improvement in performance with net asset value rising 8.8% in the first nine months of the year. Over one year to 30 September, the portfolio gained 10.4%, in line with RIT’s historic average since launch in 1988, although its shares fell 2.8%.

Ewan Lovett-Turner, head of research at the trust’s corporate broker Deutsche Numis, said the improvements in disclosure would help to explain to investors what RIT Capital does for their portfolios.

‘Many were left without the information to answer these questions and we believe this has contributed to the selling and lack of demand. As a result, it is promising that the company is providing more easily accessible information, and is more open.’

RIT’s removal from the Fidelity restricted list still leaves other investment companies suspended on the platform. Over the summer, Fidelity barred Shires Income (SHRS ), Majedie Investments (MAJE ), Downing Strategic Micro-Cap (DSM ) and JPMorgan Emerging Europe, Middle East & Africa Securities (JEMA ) on the grounds of risk or poor value for money.