Highly active multi-manager approach offering a ‘one-stop shop’ for capital appreciation and income…

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Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Witan. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Witan

Witan is a self-managed investment trust which aims to achieve growth in capital and income over the long term, through a portfolio of global equities.

The team follow a highly active multi-manager approach, using a range of third-party managers who run concentrated portfolios of 15 to 60 stocks. Currently there are ten managers in the portfolio, with allocation sizes and mandates being controlled by the board and executive team, led by Andrew Bell. Alongside this, the executive team are directly responsible for up to 12.5% of the portfolio, investing in specialist collective funds and smaller managers that could be larger constituents in the future.

Since adopting the multi-manager approach in 2004, the trust has performed strongly relative to peers and the benchmark. This has also been seen over the short term, although the current exposure to the UK and low exposure to FAANG stocks have been a slight headwind in the short term on a relative basis. Alongside capital appreciation, the trust offers investors a strong income stream. The trust has an enviable track record of 44 years of dividend increases, and over the past five years the trust has delivered triple the dividend growth of the average peer in the sector.

Over the past few years, the trust has traded on a narrow discount to NAV. The current discount of 3.8% is a little wider than in recent years, and the company is repurchasing shares on a regular basis.

Kepler View

For us, Witan continues to be one of the more attractive investment vehicles for investors searching for an actively managed equity global portfolio for both capital appreciation and income. Importantly, the way the portfolio is put together means that there is very little single-manager risk, making it an excellent ‘fire and forget’ trust for global exposure.

The trust boasts a strong long-term track record, and the executive team have a proven ability to identify strong managers for the trust’s allocations. In addition, the executive team have also added considerable value through the direct holdings portfolio over time.

Over ten years to the end of August 2019, Witan has achieved its goal in outperforming the returns of its composite benchmark. The income the trust offers is also not to be overlooked: Witan has raised the dividend significantly faster than the rate of inflation.

As a result, the trust has the fourth-highest yield in the global sector (2.3%), and one of the most impressive dividend growth records in the investment trust sphere. The company has increased its dividends for 44 consecutive years, and at a compound annual rate of 10.3% over the past five years, this is triple the peer group average. The most recent dividend is covered 1.5x by revenue reserves, giving investors confidence that this already impressive track record of dividend growth will be able to continue going forward.

bull bear
A well-defined and simple-to-understand investment approach means that investors can benefit from a diversified array of concentrated portfolios As a highly active global trust Witan may lack appeal for investors who want to do their own asset allocation
Since the change in strategy in 2004, the trust has delivered strong returns Due to poor performance in Q4, the trust was unable to outperform the benchmark in 2018
A reliable dividend, progressively growing for the past 44 years
William Heathcoat Amory
William Heathcoat Amory is a co-founding partner of Kepler Partners LLP and leads the Kepler investment trust research team. William has 18 years of experience as an investment company analyst. Prior to co-founding Kepler Partners in 2008, he was part of the Extel number 1 rated research team at JPMorgan Cazenove.

Fund History

Disclaimer

This report has been issued by Kepler Partners LLP.  The analyst who has prepared this report is aware that Kepler Partners LLP has a relationship with the company covered in this report and/or a conflict of interest which may impair the objectivity of the research.

Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. It is strongly recommended that if you are a private investor independent financial advice should be taken before making any investment or financial decision.

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