Witan Investment Trust achieved a net asset value (NAV) total return of 10.8 per cent during the first half of this year, beating its benchmark by 3.4 per cent.
As a result of beating the benchmark during the first six months of 2017 Witan expects to increase its full year dividend for the 43rd year in a row.
Since 1 January 2017, the Witan Investment Trust benchmark has been a composite of the following equity regions: UK 30 per cent, North America 25 per cent, Europe (excluding UK) 20 per cent, Asia Pacific 20 per cent and emerging markets 5 per cent.
The share price total return was 12.2 per cent as Witan’s shares narrowed from a discount of 4 per cent at the end of 2016 to 2.7 per cent at the end of June 2017.
A second interim quarterly dividend of 4.75p per ordinary share will be paid in September. Total dividends paid in respect of the period are 9.5p per ordinary share (2016: 8.5p).
Eight of the 10 external managers in place at the end of 2016 outperformed, as did the portfolio of direct holdings.
Harry Henderson, chairman of Witan Investment Trust, said: “Witan’s net asset value (NAV) total return was 10.6 per cent taking the par value of our debt and 10.8 per cent taking debt at fair value. This was well ahead of the benchmark’s return of 7.4 per cent during the period.
"Over the longer term, performance also remains ahead of our benchmark, with a 5 year NAV total return performance of 119.7 per cent, compared with 89.2 per cent for the benchmark.
"Having increased our dividend every year since 1974 (a 42 year record of increases), in the absence of unforeseen developments we also expect to increase the full year’s dividend for 2017 ahead of inflation.
“Our investment portfolio significantly outperformed, gaining 9.6 per cent, with performance further assisted by the use of gearing and, to a small extent, the uplift from share buybacks.
"The share price total return of 12.2 per cent was ahead of the NAV total return, due to further progress in narrowing the discount.“
Witan’s shares ended 2016 on a 4 per cent discount, which was below the widest levels reached in the aftermath of the Brexit referendum but wider than the average in recent years.
During the first half of 2017, the company continued to buy back shares, purchasing two million shares at an average discount of 4 per cent in the early months of the year and a further 0.3 million shares in May and June at an average discount of 2.1 per cent.
This added £0.9m to the net asset value of the company.
At the end of June, the discount was 2.7 per cent, which had narrowed further to 2.1 per cent as of 8 August.
stephanie.hawthorne@ft.com
