The 110 year-old Witan Investment Trust (WTAN) has announced the adoption of a new global performance benchmark and the appointment of a new manager for part of its global portfolio.
As well as being one of the UK’s oldest investment trusts, Witan is one of the largest with £2.2bn of assets managed on behalf of more than 25,000 investors.
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The trust invests in global equities with management divided between ten external managers who each take a highly focused approach to stock selection. The aim is to create a diversified portfolio by allocating funds to the best global stock-pickers.
MOVING TO A SIMPLER BENCHMARK
Effective from 1 January, Witan will use a revised performance benchmark comprising 15% UK equities (FTSE All-Share) and 85% global equities (FTSE All World) to reflect its increasingly global exposure.
For the last three years, the trust had used a benchmark comprised of 30% FTSE All Share, 25% FTSE All-World North America, 20% FTSE All-World Asia Pacific, 20% FTSE All-World Europe (ex UK) and 5% FTSE All-World Emerging Markets.
Prior to that the benchmark was even more skewed to the UK with a 40% weighting in the FTSE All Share index.
In practice, as the All World index has a 5% weighting in the UK, the benchmark will still have a 19% skew to the UK. However, given the multi-manager strategy and a bottom-up approach to stock-picking, the portfolio as a whole is likely to differ quite a bit at the sector and geographical level from the composition of the benchmark.
NEW GLOBAL MANDATE
In keeping with the more global approach, Witan has appointed fund managers Lindsell Train to run a global equity portfolio of roughly £180m. This replaces the UK equity portfolio which Lindsell Train managed since 2010, which had been an ‘outstanding success’ according to Witan’s management generating annual returns of more than 15%.
On a practical level, the transition from a UK to a global portfolio took place last month with a number of UK stocks being sold and replaced with global names including many of the big brands for which the firm is well known as backing.
For Lindsell Train this is a welcome endorsement after its funds suffered outflows and poor share price performance in the third quarter of 2018 as ‘value investing’ reared its head after laying dormant for many years.
