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Witan – a good year for active management

Witan has announced its annual results for the year ended 31 December 2017. During the period, the trust provide an NAV total return of 19%, thereby outperforming its benchmark’s return of 15.1%. The trust discount to NAV reduced during the period from 4.0% to 1.6% at the year-end. The dividend increased by 10.5% to 21.0p. Witan highlights that this is more than double the dividend’s level ten years’ ago in 2007, and represents the 43rd consecutive annual rise.

2017 – a good year for active management

Witan has used a a multi-manager approach since 2004. Under this approach, it selects a range of external managers who have demonstrated the potential to outperform, to create a portfolio targeting both capital and income growth. Witan says that 2017 was a good year for active management and its external managers, as a whole, beat their benchmarks. The net asset value total return outperformance was principally driven by this, along with the decision to maintain 10% gearing for most of the year. Notable performances were achieved by Lindsell Train (+21.8%), Lansdowne (+19.1%) and Veritas (+17.1%). These, together with the Direct Holdings portfolio (+27.2%) all materially outperformed their benchmarks.

The investment managers’ performance is summarised in the table below.

Investment Manager Witan assets managed (£M) % of Witan’s AUM at year-end Portfolio performance in 2017 (%) Benchmark performance in 2017 (%)
Artemis 184.8 8.3 7.7 13.1
Heronbridge 138.1 6.2 12 13.1
Lindsell Train 175.6 7.9 21.8 13.1
Lansdowne Partners 330.6 14.9 19.1 11.6
Pzena 315.3 14.2 14 13.8
Veritas 311.4 14 17.1 13.8
CRUX 98.7 4.4 n/a n/a
S.W. Mitchell 99.5 4.5 n/a n/a
Matthews 260.3 11.7 21.5 20.6
GQG 92.6 4.2 n/a n/a
Witan Direct Holdings 203.3 9.1 27.2 15.1

 

Portfolio activity

Witan’s active share (this describes the proportion of the portfolio which differs from the benchmark) rose from 70% to 77% during 2017. Exposure to emerging markets was raised in February with the appointment of GQG. In May, the five global managers were consolidated into three and in October two managers, with concentrated portfolios, were appointed to increase European exposure.

About Witan

Witan bills itself as the only fully multi-managed investment Trust (i.e. it gives portions of its portfolio to different external managers to invest rather than managing its own money although one portion of the fund is currently invested in a selection of other listed investment companies and this part of the portfolio is managed internally).

Witan’s global portfolio offers exposure to the world’s major equity markets thereby offering diversification by geographical region, industrial sector and individual stock. The multi-manager approach means that the Trust employs a number of specialist fund managers running different portions of the portfolio, managers who we believe are the best in that individual area and are therefore more likely to generate decent returns for investors.

Witan – a good year for active management : WTAN

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