The Board of Witan Pacific Investment Trust plc has today announced audited full year results for the period ended 31 January 2018. A summary of the results:
- Net Asset Value (NAV) total return of 17.3% for the year, compared with the benchmark 17.9%.
- Share price total return of 22.1%
- A final dividend of 3.25 pence per share making the full-year dividend 5.5 pence per share (2017: 4.75 pence), an increase of 15.8% on 2017 and the 13th year of consecutive dividend increases
- NAV total return of 245.5% since the inception of the multi-manager strategy in 2005, compared with the benchmark total return of 233.7%
- Net assets £244 million (2017: £217 million)
Witan Pacific is the only UK investment trust with a strategic focus across the entire Asia Pacific region, including Japan, Australia and India, investing in companies operating within this increasingly interdependent region. Since 2005 the Company has operated a multi-manager strategy to give access to a variety of investment styles and skills, and a broader investment opportunity.
Witan Pacific’s Chair, Susan Platts-Martin says:
“Witan Pacific has provided attractive returns over the long term from its mandate to invest across the whole of the Asia Pacific region and is the only investment trust to do so. Its multi-manager approach provides access to specialist investment managers that many investors would not otherwise be able to access directly or not at such a competitive cost.
This has been a year of strong performance from the region, with all country components of our benchmark index providing positive and mostly double digit returns. The global backdrop has been generally supportive of equities with a healthy world economy, subdued inflation, growing corporate earnings and loose global monetary policy. This environment helped our benchmark appreciate by 17.9%.
The Company’s net asset value total return was 17.3% and the share price total return was 22.1%, compared with our regional benchmark, the MSCI AC Asia Pacific Index, which delivered a return of 17.9%. A significant proportion of our benchmark’s performance came from just five technology stocks: Baidu, Alibaba, Tencent (collectively known as the BATs), Samsung and Taiwan Semiconductor (“TSMC”). Whilst our managers, in aggregate, own significant positions in Samsung and TSMC, they have been underweight the BATs stocks believing that valuations have become stretched or that corporate governance standards (including a lack of transparency or dividend payments) remain below par. The underweight position in these three companies was a drag on performance. Positive contributions came from long‑held positions in China and a wide variety of stocks based throughout the rest of the region, demonstrating that good performance can be found more broadly and outside the more fashionable internet sector.
Whilst the Company’s absolute performance has been good since the multi-manager strategy was implemented, generating an annualised return of 10.3%, the performance relative to the benchmark over the last few years has not been as strong as we would like. Therefore, following our visit to the region in early 2017 the Board decided to alter the manager line-up with a view to strengthening performance. An extensive search was conducted with the help of an external consultant, resulting in the selection of two new portfolio managers: Robeco Institutional Asset Management BV and Dalton Investments LLC. Robeco takes a long-term selective value approach to investing, with its focus on future cash flows aiming to avoid overvalued speculative stocks. Dalton follows a fundamental highly selective value approach where an alignment of interest between management and shareholders is evident, with a bias towards smaller companies. The holding in the Gavekal Asian Opportunities UCITS was sold. At the year end, the portfolio allocation to the four managers was: Matthews 40.2%, Aberdeen 25.1%, Robeco 25.1%, Dalton 9.6%.
These changes are designed to improve the potential for outperformance by accentuating the emphasis on active portfolio management and stock selection, to provide shareholders with exposure to a broad set of opportunities across the region. Although the managers each have mandates covering the entire Asia Pacific region, the revised mix is expected to increase portfolio exposure to smaller capitalisation or lesser-known companies whose growth prospects have more chance of being underestimated by the market. The Board believes these changes will enhance the benefits of the multi-manager strategy, which aims to deliver outperformance for investors while reducing the peaks and troughs arising from single manager performance.
Corporate earnings growth remains a strong support for markets and the regional earnings outlook appears healthy. Inflation fears have started to rise, marking a possible turning point in global interest rates. Following the strong performance of recent years we can expect returns to be more muted and markets to be more volatile. Although periodic setbacks are a normal feature of financial markets, as seen during early February they can surprise markets when sentiment has become too complacent.
We continue to believe that the Company offers an attractive vehicle for investment in Asia, a region of great opportunity with growing prosperity and rising living standards. Witan Pacific offers four specialist managers with established track records who are well placed to access the region’s opportunities on behalf of shareholders.”
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Witan Pacific Investment Trust plc
Witan Pacific Investment Trust is a multi-manager, Asia-Pacific including Japan Trust with assets of £235m (Source: Witan Pacific Factsheet 31.03.2018). The Trust moved to a multi-manager structure on 27 May 2005 with Witan Investment Services as Executive Manager. The Trust’s benchmark is the MSCI AC Asia Pacific Free Index (£) with gross dividends reinvested.
Witan Investment Services Limited is a wholly-owned subsidiary of Witan Investment Trust plc. Witan Pacific Investment Trust plc is registered as an Investment Company in England No 91798.
For further information please contact:
James Hart, Investment Director
Witan Investment Services Limited
Tel: 020 7227 9770
Alexis Barling, Director of Marketing
Witan Investment Services Limited
Tel: 020 7227 9773