Performance measurement benchmark and Global manager appointment
Tuesday, 07 January 2020
As announced in September 2019, Witan has introduced a revised performance benchmark with effect from January 2020.
New benchmark
As announced in September 2019, Witan has introduced a revised performance benchmark with effect from January 2020. The benchmark is now 15% UK equities and 85% Global equities. The effective UK benchmark weight will be approximately 19% since, in addition to the specified 15% in the UK, the global index has a 5% weighting in the UK. Previously, Witan’s benchmark was 30% UK and 70% in a composite of four regional indices.
We believe the new benchmark is more reflective of the range of opportunities in the global economy and that shareholders will benefit in the long-term from exposure to a more international investment universe.
Witan's benchmark is used as a reference point for comparing performance, reflecting the investment universe from which most of the portfolio holdings are chosen. Witan's active multi-manager portfolio is not designed to track any index or combination of market indices, with decisions on investment being distinct from the benchmark used for performance comparison. Our managers invest in companies on the basis of their shares’ potential to deliver above-average returns and to outperform market indices. Consequently, our portfolio will continue to differ materially, at the stock, sector and geographical level from the composition of the benchmark. Progress can be monitored from the fact sheets published monthly on Witan’s website (www.witan.com), which include Witan’s geographical exposure, the top twenty holdings and the percentage managed by each manager. The complete portfolio, with a lag of three months, is published monthly.
Lindsell Train Limited - new Global equity mandate
As part of the evolution of Witan’s portfolio towards a greater global exposure, Lindsell Train Limited has been appointed to manage a global equity portfolio with a value of £180m (approximately 8% of Witan’s portfolio), replacing the UK equity portfolio which they have managed for Witan since 2010. The transition from the UK to the global holdings was effected during December 2019.
Lindsell Train’s UK portfolio at Witan has been an outstanding success. It achieved an annualised return of 15.5% from September 2010 to the end of November 2019 (the latest available report), which was almost twice the 8.4% annual rate of return from the UK stock market over the same period. Lindsell Train’s global equity portfolios (managed with the same philosophy) have been similarly successful and the Board is confident that their approach of investing in exceptional, enduring brand franchises as long term investors will continue to benefit Witan’s shareholder returns, while offering a broader opportunity set than the UK market alone is able to offer.