Witan Investment Trust’s 2016 results revealed the vehicle posted a 22.9 per cent net asset value (NAV) total return and the dividend increased by 11.8 per cent.
In 2016, the trust’s benchmark return was 23 per cent.
The vehicle was able to increase its dividend to 19p for the 42nd consecutive annual increase.
The share price total return was 18.4 per cent, as the discount widened to 4 per cent at the year-end, compared with a discount of 0.2 per cent at the end of 2015.
The NAV total return over the last five years of 108 per cent is 25 per cent ahead of the benchmark’s 83 per cent.
Harry Henderson, chairman of Witan Investment Trust, said:“Witan has been operating a multi-manager approach for over 12 years, with the aim of providing superior results for its shareholders.
“Our chosen external managers have enabled Witan to beat the returns on our equity benchmark and raise the dividend significantly faster than the rate of inflation.
“Whilst there are many uncertainties in the world, and at the best of times future performance can never be firmly predicted, our objective remains to extend this successful record.
“2016 was an unusually testing year for many equity managers. A volatile start to the year saw sizeable falls in equities during January but the year ended with outsize returns for sterling investors as a result of the fall in the pound following the Brexit referendum.”
Andrew Bell, chief executive of Witan Investment Trust, said: “No account of 2016 would be complete without mention of the extraordinary valuations reached in bond markets.
“After several years when government bond yields had been steered lower as a means of stimulating economic growth, the process went into overdrive in 2016, with over a quarter of government bonds at one stage offering negative yields to investors.
“Paying for the privilege of lending money to governments is a curiosity - akin to paying rent to the tenants of a house you own.
“Given the influence of politics during 2016, active managers, who tend to concentrate on company-specific factors, in general found the going difficult and the majority of our third party managers underperformed during the year, in contrast to 2015.
“However, our active use of gearing and share buybacks meant that, even with a relative performance shortfall from our portfolio we were able to end the year with performance very close to the 23 per cent rise in our benchmark, after all costs.”
emma.hughes@ft.com
