Witan Investment Trust publishes full year results: NAV total return per share was +12.7% in 2023; dividend increased for the 49th consecutive year; review of future investment management arrangements

18 March 2024

A summary of the results is below:

  • Full-year NAV total return of +12.7%. Share price total return of +10.1% 
  • The benchmark returned +14.7%, the AIC Global sector NAV total return was +12.8% and the UK CPI rose 4%
  • Witan took advantage of the widening in the discount (7.8% at year-end) and bought 8.0% of shares into treasury. This benefited shareholders by generating an uplift in NAV of £11.5m, which offset the majority of the ongoing charges
  • The dividend increased by 4.1% to 6.04 pence, more than double that paid in 2013 and an unbroken 49 year run of increases
  • Since Witan adopted a multi-approach in 2004, its NAV total return of 428% has broadly matched the 433% total return of its benchmark, while the share price total return (510%) has been well ahead. The dividend has also risen significantly above the rate of inflation over the period
  • In 2024, in continued positive market conditions, Witan’s NAV total return (to 13 March) was 5.9%, slightly ahead of the return on the Company’s benchmark, which was 5.8%
  • Our CEO, Andrew Bell, has recently informed the Board that he plans to retire from Witan during the coming year. The Company has decided to undertake a review of its future investment management arrangements and to invite proposals for the future management of the Company’s portfolio.

Andrew Ross, Chairman of Witan Investment Trust plc said:

“Two features of 2023’s equity returns are worth noting. The first was the extent to which global equity indices were dominated by a small number of US-based technology stocks. 60% of the US market’s total return was delivered by seven leading technology companies, with the remaining 493 stocks in the index delivering under half of the market’s return between them. This was a difficult backdrop for fund managers to navigate without over concentrating their portfolios. In spite of this, the second point to note is that our core managers in aggregate outperformed. Our lagging of the benchmark was entirely attributed to weakness from the GMO Climate Change Investment Fund and Witan’s holdings in investment companies, which have both been strong areas for shareholders in the past. We see prospects for both to recover in 2024.

In 2004, in a major strategic shift, Witan adopted a multi-manager approach to investing in global equities, at the same time becoming independent of any single investment management group. For much of the subsequent period, the approach proved successful and, although the volatile conditions in recent years have eroded earlier outperformance, Witan’s performance remains in line with its equity benchmark in net asset value total return terms and ahead in share price total return terms since making that strategic shift.

However, in more recent years the asset management and investment trust sectors have seen considerable changes in markets, competition, governance and regulation. These pose new investment and communication challenges for independently managed investment trusts to address successfully and cost-effectively.

In view of these structural changes, Andrew Bell’s forthcoming retirement after over 14 years as our CEO is an appropriate opportunity for Witan to review proposals for the future management of the Company’s portfolio.

The process of considering proposals will take place over the coming months and a further announcement will be made when a preferred option has been chosen. In the meanwhile, Witan will continue to be managed by Andrew Bell and the rest of the Executive Team, in accordance with the current investment approach.”

Andrew Bell, Chief Executive Officer of Witan Investment Trust plc said:

“Inflation, volatile interest rates, East-West tensions, and war in the Middle East. For those longer in the tooth, there is a sense of 1970s déjà-vu in the conjunction of circumstances that faced investors in 2023. In many developed economies, inflation reached levels not seen for several decades.

“Having misjudged the balance between transitory factors driven by supply disruptions and those driven by fiscal largesse, central banks adopted and sustained a hawkish bias for much of 2023, until the dying months when they began to declare advantage, if not victory. A year ago, we characterised the peak of interest rates as likely to resemble Table Mountain rather than the Matterhorn (a metaphor which has since been plagiarised by two central bankers!) and we have been on the Table-top now for many months. Whilst inflation currently remains above official targets, it seems probable that rates will start to fall before 2% inflation is reached – it is easier to be patient about the pace of convergence when the direction is clear.

“At the start of 2023, there was a concern that most of the world was heading for a recession, engineered by the central banks to reduce inflation. The one exception was China, confidently expected to rebound as it ended its Covid-suppression restrictions. Although the UK and Europe have tiptoed near the shallows of recession, the US has grown robustly, while China’s recovery, in the year of the Rabbit, lacked the staying power of the Duracell Bunny. Forecasts for 2024 are for insipid growth but not recession. If inflation has subsided without a widespread economic shakeout, this would suggest economies are working better than in past inflationary bouts, which may be worth something in terms of stock market valuations.

“Despite the uncertainties associated with geopolitics and the adjustment to a rapidly rising level of interest rates, 2023 was (eventually) a benign year for equity returns. In sterling terms, the MSCI All Country World Index rose by 16%, led (again) by the US +19% with Europe +16% and Japan +13% in silver and bronze medal positions. The UK and Emerging Markets brought up the rear with returns of 8% and 4% respectively. 

“We believe our diverse range of managers remains well-positioned for 2024 when, with a turn in the interest rate cycle and unusually wide valuation spreads within the markets, we expect to see share returns more evenly spread than in the unusually concentrated markets of 2023.”

A video interview with Andrew Bell, Chief Executive Officer of Witan Investment Trust, discussing the 2023 full year results and the current outlook is available on the Company’s website at www.witan.com/witan-full-year-results-2023..

- 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]

Isabella Seekings, 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 £1.8bn (source: Witan, as at 29.02.2024). Witan operates a multi-manager structure and currently has 8 principal managers. For further details please visit www.witan.com.

Issued and approved by Witan Investment Services Limited FRN 446227 on 18th March 2024. 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/Witan. Total return includes the notional investment of dividends.
 
** Witan’s benchmark is a composite of 85% Global (MSCI All Country World Index) and 15% UK (MSCI UK IMI Index). From 01.01.2017 to 31.12.2019 the benchmark was 30% UK, 25% North America, 20% Asia Pacific, 20% Europe (ex UK), 5% Emerging Markets. For more information go to www.witan.com/support/legal-information..