Witan Investment Trust (WTAN) aims to generate long-term growth in income and capital using a multi-manager approach to investing in equities globally. The trust has outperformed its benchmark over one, three, five and 10 years, and has recorded consecutive dividend growth over 40 years. Whilst there can be no certainty over future performance, the manager selection and diversification provided by Witan may well appeal to investors seeking a one-stop solution for global equity investment.
Witan takes a multi-manager approach to investment in global equities (UK c 40%), assigning mandates to between 10 and 15 managers with different styles and specialisations. Andrew Bell took over as CEO in 2010 and has made changes to shift the portfolio towards managers with a higher conviction, concentrated, nonbenchmark approach. This avoids over-diversification while mitigating the volatility that may arise from investment in a single manager. The trust also invests up to 10% of assets directly in collective funds to gain exposure to undervalued assets and to provide a geographical allocation overlay when appropriate.
Witan’s composite benchmark recorded a modest positive return of 1.6% over the 12 months to end-November 2015, but this figure masks considerable volatility reflecting fears of waning Chinese growth, fluctuating risk aversion and uncertainty over the policy of key central banks. These concerns seem set to remain key considerations for markets but Witan’s managers point out that global economic growth remains on a positive path with the benefits of the lower oil price yet to feed through fully providing potential for positive earnings surprises. Meanwhile, although some markets appear fully valued on a historical basis, there are still opportunities for active managers to exploit.
Over the past three years Witan’s discount to NAV has narrowed substantially and for most of 2015 it has traded close to or above NAV, probably reflecting the strong relative performance record and the appeal of the multi-manager approach to many investors. As a result, the trust has been providing liquidity by issuing shares, thereby containing any premium.