Witan increases gearing for extra UK exposure

Witan, one of Britain's largest investment trusts, has begun to increase its gearing upon what it describes as 'attractive' market levels.

The £900 million trust previously had no gearing but has recently added £30 million to assets run by Artemis, Marathon Asset Management and Pimco.

Mark Lynam, Witan's chief investment officer, said the board had decided to increase gearing to 6% in order to invest in the Pimco Global Corporate Bond fund.

He added: 'Following the extremely volatile conditions witnessed in the final quarter of 2008 and early 2009, we felt that market levels had reached an attractive level: we therefore took steps to increase Witan’s gearing to top up the trust’s UK exposure.

'The active element of the Trust’s UK portfolio was increased, with Artemis Investment Management and Marathon Asset Management both awarded an additional £10 million.

'Both managers have delivered significant outperformance since inception last May: Artemis have outperformed its benchmark by 13.9% and Marathon by 8.7%.'

At 11.51 the trust's shares remained stable with a slight increase to 1.8% or 6.5p, to 359p, a 10% discount to net asset value.