Witan Pacific blames stock selection for weak performance

Witan blamed poor stock selection for the underperformance of its Pacific trust.

The trust lost 19.7% in 2008 versus an Asian sterling index loss of 17.9%.

Witan Pacific chairman Gillian Nott said that despite adding value through allocation, particularly on yen versus sterling, stock selection had been disappointing.

Just under half the portfolio is managed by Nomura, whose value-orientated selection had performed poorly as markets embarked on an indiscriminate race to the bottom.

Aberdeen, which manages just over 50% of assets on a more fundamental stock basis, outperformed the benchmark by 2.4%, but this proved insufficient to recover losses.

The £104.62 million trust is currently running at an 18% discount although this marks a sharp improvement from near 25% at the start of the year.

Nott said: ‘Over the period in question markets behaved in a very volatile manner and the Nomura valuation model did not work to the advantage of our portfolio.      

‘Over the period in question markets behaved in a very volatile manner and the Nomura valuation model did not work to the advantage of our portfolio.’

The trust has increased its dividend 12.1% on last year however with a final dividend of 1.85p. A special dividend of 1p will also be paid due to a return of VAT payments.

‘The economic background in the Asia Pacific region is generally better placed for recovery relative to western economies,’ added Nott.