Witan Investment Trust 2015 Results – a 6.4% NAV total return and a 10.4% dividend increase

Wednesday, 09 March 2016

In 2015, Witan Investment Trust achieved a net asset value total return of 6.4%, 2.9% ahead of its benchmark* and increased its dividend by 10.4%, the 41st consecutive annual rise.

Published today, the highlights of the year end results are:

  • The Net Asset Value (NAV) total return of 6.4% outperformed the benchmark’s* return of 3.5%
  • The NAV total return over the last five years of 51% is 12% ahead of the benchmark*
  • The share price total return was 5.7%, with an average premium to NAV of 0.1% during the year
  • 10.5m shares issued at a premium to NAV, raising over £83m
  • £75m long-term debt issued at under 3.5% p.a.
  • The dividend increased by 10.4% to 17.0p, more than 10% ahead of the rate of inflation for the year

2015 was another year when market sentiment was changeable, with no consistent market direction. Active investment selection was particularly important and our managers outperformed their benchmarks significantly overall, with a modest additional contribution from the Company’s use of gearing. Eight of our external fund managers outperformed their benchmarks during the year, four of them by margins of over 5%.

As a result, I’m pleased to report that Witan shareholders enjoyed a successful year, in terms of both capital and income returns. The Company’s shares enjoyed a further rerating during 2015, trading at a premium for much of the period and 2015 marks the 41st consecutive year of rising dividends.

In order to meet demand from the market, the Company issued 10.5m shares at a premium to NAV, adding over £83m to our net assets. In addition to meeting investor demand in the market, new share issuance is modestly accretive to NAV, as well as spreading fixed costs over a wider base. 

In our 2004 Annual Report, we stated that creating sustainable liquidity in Witan’s shares at or near to asset value is one of the more important long term objectives and we are pleased to have achieved this in 2015. 

During the year, the Company issued £75m of 20 and 30 year debt, at borrowing yields below 3.5%, the lowest rates achieved in the sector for many decades and we believed such low rates will benefit future shareholder returns.

Harry Henderson, Chairman of Witan Investment Trust

Equity markets delivered positive returns in 2015 in sterling terms but there were episodes of notable volatility. Economic growth fell short of hopes in 2015 but, in developed economies, was generally stronger than in 2014, while expectations for 2016 are for similar or higher growth than in 2015. 

Witan’s strategy was to remain fully invested during the periods of volatility, as the world economy appeared to be improving, though watchful, increasing investment during periods when markets overreacted to events. 

On the whole, 2015 was a ‘glass half-empty’ year in market sentiment terms, with a propensity to magnify disappointments and to dismiss positive news as already priced in, or about to turn bad. On the positive side, economies in the US and the UK enjoyed a further year of 2-3% growth, with similar rates expected in 2016. 

It seems unlikely that the world will see rapid rates of economic growth in 2016 but nor does it appear probable that there will be renewed slippage into recession. Interest rates seem likely to remain exceptionally low for an extended period. While there is always the potential for policy mistakes, policy-makers appear aware of the risks of weak growth and price deflation and the resulting pro-growth emphasis should prove supportive for equity markets. However, as recent months have demonstrated, there will be inevitable periods of volatility when investor confidence is tested by shorter term market and economic events.

Andrew Bell, Chief Executive of Witan Investment Trust

 - ENDS –

*The Witan Investment Trust benchmark is a composite of the following four equity regions: UK 40%, North America 20%, Europe (ex UK) 20% and the Asia Pacific 20%.

For further information please contact:

Andrew Bell, Chief Executive Officer
Witan Investment Trust plc
Tel: 020 7227 9770
[email protected]

Hannah Philp, Director of Marketing 
Witan Investment Trust plc
Tel: 020 7227 9770
Hannah[email protected]

Notes to Editors

Witan Investment Trust plc

Established in 1909, Witan is one of the UK's largest investment trusts, managing £1.8bn (source: Witan, as at 31.12.2015) on behalf of over 30,000 investors. Witan operates a multi-manager structure and currently has 11 appointed managers. For further details please visit www.witan.com.