HOW CAN A MULTI-MANAGER FUND BENEFIT YOUR PORTFOLIO?
Established in 1909 to manage the estate of the first Lord Farringdon, Witan Investment Trust has a rich heritage. In 2004 Witan took a new direction and decided to adopt a multi-manager approach, selecting investment managers with different styles and specialisations, in order to allow the trust to play to managers’ individual strengths to reduce the performance volatility that can arise from dependence on a single manager for everything. Witan invests its shareholders’ funds primarily in a broad geographical spread of global equity markets and aims to profit from opportunities created by global economic growth, generating longterm capital growth together with an income that rises faster than the rate of inflation.
Chief Executive, Andrew Bell explains; ‘If you choose one manager, however good they are, they will tend to play to a certain theme, which will work very well in some market conditions and less well in others. Our objective is to choose people based on what they’re good at. Someone who’s good with UK equities might not have global expertise, so we choose specialists. Part of our purpose in choosing a selection of managers is also to smooth out their peaks and troughs in performance’.
Over-diversification is a potential pitfall with this approach. Since each manager will have multiple stocks in their portfolio, the total number of stocks can mount up, with a risk that they end up cancelling each other’s views out. ‘We emphasise higher conviction stock-picking by our managers to reduce the risk of unintentional index-hugging. In investment, as in cooking, the individual ingredients to your recipe need some tang and spice about them, to render the final dish appetising’.
Although past performance is no guarantee of future performance, over the last 10 years the Company’s net asset value total return has been 228% versus the benchmark performance of 178% (performance figures are 30th September 2008 to 30th September 2018) and 2018 marked the trust’s 43rd year of consecutive dividend growth.
With a global strategy, Witan aims to offer investors a one-stop shop for global equities seeking to deliver long term growth in income and capital.
Witan Investment Trust is an equity investment. Please remember past performance is not a guide to future performance, and the value of shares and the income from them can rise and fall as a result of currency and market fluctuations, so investors may not get back the amount originally invested.