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Witan is ready to fight back after lagging the market

By Daniel Coatsworth, Editor, Shares. First published 16th May 2019

The investment trust has growing competition from low-cost global tracker funds

Growing awareness among the general public of low-cost exchange-traded funds (ETF) means actively-managed funds have to try even harder to stand out from the crowd and justify their typically higher fees.

With ETF products such as Lyxor Core MSCI World (LCWL) offering exposure to companies around the world for a mere 0.12% annual charge, an actively-managed fund will need to be a compelling alternative in order to attract investors’ money.

Among the active funds in this situation is Witan (WTAN). Focused on global equities, its 0.75% ongoing charge (excluding performance fees) is very competitive versus the peer group yet still materially higher than the aforementioned Lyxor ETF.

Investment director James Hart acknowledges the competition from passive investment products such as ETFs and says Witan isn’t complacent about its position in the market, despite having £2.1bn of gross assets and being one of the most popular investment trusts among retail investors.

‘Anyone can buy a cheap index fund. We need to offer something superior because we charge more,’ admits Hart.


While Witan generally has a good performance track record, last year wasn’t a trophy period for the investment trust. Not only did its net asset value fall by 8.4% on a total return basis, but it performed worse than the 6.5% decline from its benchmark – which is a mixture of indices tracking different geographic territories.

When assessing funds it is important to consider their style(s) and how that fits into current market conditions. In Witan’s case, the value side of its portfolio suffered in 2018 as value remained out of favour as an investment style.

Performance is still lagging with the trust’s net asset value up 8.5% in the first quarter of 2019 versus a 9% gain from its benchmark.


While frustrating for the Witan team and shareholders, this is hardly disaster territory. Last year was a difficult market for most investors and the scale of the underperformance this year isn’t that bad.

Ultimately a product like Witan should be judged on a much longer term and it is here that the investment trust has excelled.

Net asset value growth over the past five years was 64.9% versus 57.7% from the benchmark, and 268.2% versus 220% respectively over a 10-year period.