Witan Investment Trust has described its net asset value total return as a “a relative underperformance” of 1.2 per cent, after revealing that its total return was 1.1 per cent in the first six months of this year, compared with its benchmark return of 2.3 per cent.
Its results for the six months ending 30 June showed that six of Witan’s 11 external managers, together with the directly held portfolio, outperformed their respective benchmarks, while five underperformed during the period.
The share price total return was 6.9 per cent, with a narrower discount continuing the trend seen in 2013. The dividend to be paid for the period is 7.2p per share, up from 6.6p a year ago.
Harry Henderson, chairman of Witan Investment Trust, said: “2014 has so far been a relatively subdued year for global equity markets.
“This is partly a consequence of the strong gains enjoyed during 2013, when Witan’s portfolio outperformed significantly. Most equity markets at the start of 2014 were in a need of a period of consolidation, to allow earnings to catch up.”
He added that the outlook for economic growth is improving but “the good news is unevenly distributed”.
While the UK and the US appear set on a recovery path, European growth remains fragile, despite the “looser monetary policy” recently adopted by the European Central Bank, Mr Henderson said.
He commented: “The current conflict in Ukraine adds an unpredictable factor, given concerns over the possible Russian threat to Ukraine’s borders and the prospect of continued economic sanctions.
“Equities have been calm on the surface this year, although sector performance has been changeable as investors booked gains on 2013’s winners (particularly mid-cap and smaller companies) and sought value in areas that had lagged.
“The mild euphoria at the end of 2013 has dissipated, while earnings reports and economic growth have improved the fundamental foundations for equities. However, there is less of a safety margin from valuations, which generally appear full rather than cheap. The need for selectivity is consequently greater.”
