Witan Investment Trust’s NAV total return was up 13.5% in the first half of 2019

Tuesday, 13 August 2019

During the six months ending 30 June 2019, Witan Investment Trust had a strong net asset value total return of +13.5%; the benchmark’s** return was higher still, at +14.9%.

The highlights of the results are:

  • The Net Asset Value (NAV) total return was +13.5%, 1.4% less than the benchmark’s** return of +14.9%
  • The share price total return was +11.7%, as the discount widened to 2.9% at the year-end (2018: discount of 1.3%)
  • A five-for-one share split was completed on 28th May 2019 to improve liquidity for regular savers
  • Strong revenue growth augurs well for a further year of real dividend growth in the dividend, as the revenue per share rose by 9% to 3.42p per share at 30 June 2019 (30 June 2019: revenue per share 3.14p)
  • Witan has joined the Institutional Investors Group on Climate Change and £20m was invested in a specialist fund which seeks returns from efforts to combat or mitigate the effects of climate change

Since the 30th June, £50m long-term debt was issued at a 2.39% yield, which is a record low for the investment trust sector

Equity markets have more than reversed 2018’s weakness, with first half returns led by the US (+19%) and Europe (+18%). The UK market rose 13%, despite continued uncertainty over Brexit and a changeable political backdrop, although UK smaller companies lagged with a rise of 9%, reflecting domestic concerns.

Although the direction of markets in the first half of 2019 was the reverse of the negative returns endured during the late months of 2018, an unwelcome point of similarity was that investment sentiment was changeable and, with it, the relative performance of some of our managers. Witan’s net asset value total return was a healthily positive 13.5%; the benchmark’s** was higher still, at 14.9%. Although our gearing delivered a strong positive contribution to returns, the main reason for the shortfall was that our underlying investment portfolio underperformed the benchmark by 2%. Returns were pulled back by weak performances from two of our global managers, our Asia manager and the direct holdings portfolio. A common factor of the three external managers who underperformed was a cyclical bias to their portfolios during the period, whereas the market’s preference was for growth stocks and more defensive companies. 

Revenue earnings per share for the period were 3.4 pence per share for the first half of 2018, a rise of 9% from the 3.1 pence per share for the first half of 2018. Investment income benefited from higher company pay-outs, portfolio changes since 2018 and a weaker level of sterling against overseas currencies. This augurs well for a further year of dividend growth. 

The prospects for the rest of 2019 and next year depend to some degree on whether the interest rate cuts and other forms of easier policy are viewed as a form of policy insurance to prolong the economic upswing or as emergency treatment for a moribund global economy. With global growth forecasts low but positive, the former looks more likely. 

Given this backdrop and the ever-changing predictions over US-Chinese trade relations and Brexit, our managers continue to concentrate on individual companies’ earnings prospects when selecting investments.

Harry Henderson, Chairman of Witan Investment Trust

A video interview with Andrew Bell, Chief Executive Officer of Witan Investment Trust, discussing the 2019 half year results can be viewed on the Company’s website at here

– ENDS –

For further information please contact:

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

James Hart, Investment Director
Witan Investment Trust plc
Tel: 020 7227 9770
[email protected]

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

Notes to Editors

Witan Investment Trust plc

Established in 1909, Witan is one of the UK's largest investment trusts, managing £2.0bn (source: Witan, as at 28.02.2019) on behalf of over 25,000 investors. Witan operates a multi-manager structure and currently has 10 appointed managers. For further details please visit www.witan.com.

Issued and approved by Witan Investment Services Limited. Witan Investment Trust is an equity investment. Please remember that past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise as a result of currency and market fluctuations and you may not get back the amount originally invested.

Discrete Performance*

 

* Source: Morningstar, percentage growth to 30th June each discrete year. Total return includes the notional investment of dividends.

** Witan’s benchmark is a composite of 30% UK, 25% North America, 20% Asia Pacific, 20% Europe (ex UK) and 5% Emerging Markets. From 01.10.2007 to 31.12.2016 the benchmark comprised of 40% UK, 20% North America, 20% Europe (ex UK) and 20% Asia Pacific.. For more information go to www.witan.com/support/legal-information.