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Witan Pacific performance hit by Japanese weightings
by Matthew Goodburn on May 19, 2007 at 07:00
Witan Pacific Investment Trust saw its weighting to Japanese equities hamper performance in the year to 31 January 2007.
The £134 million trust outperformed the MSCI Asia Pacific benchmark by 1.7% in Net Asset Value (NAV) terms and achieved a year on year dividend increase of 12.8% to 1.50p per share over the period.
Aberdeen Asset Management’s half of the trust outperformed the benchmark by 4.2% over the period while Nomura Asset Management only achieved a -0.7% return due primarily to a heavy weighting to Japan and to resource companies in particular.
Witan managing director James Budden said Nomura had a 42% weighting to Japan while Aberdeen was underweight Japan with a 25% stake.
He said: ‘The difficult issue is the Japanese weighting. A year ago it was the other way round but we believe the mix of the two will outperform going forward.’
‘By employing Nomura the trust will always have a considerable Japanese weighting because they stick quite close to the index but the mix is balanced by Aberdeen because they are always underweight Japan.’
‘The trust looks to reduce volatility by this blended approach and does not look to take big risks.’
The trust’s share price total return fell by 3% in the year to 31 January, in line with the Asia Pacific sector, as the discount widened from 6.3% to 11.3%.
The trust adopted a multi-manager approach in May 2005 and brought in Aberdeen Asset Management and Nomura Asset Management’s Singapore investment teams headed by Hugh Young and Graham Muirhead respectively to manage the segregated portfolios.
Budden ruled out any beauty parade for new managers in the near future.
He said: ‘This is the first full year for both managers and we will not look to review them before next January.
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