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Witan's first half outperformance powered by Japan call
by Dylan Lobo on Aug 14, 2013 at 14:39
Andrew Bell's restructure of the Witan Investment Trust bore fruit in the first half with eight out of the 10 fund managers on the fund outperforming in the first half.
In addition, the directly held portfolio outperformed as listed private equity funds, such as 3i Group, were re-rated.
Overall, Witan's net asset value increased by 16.7% in the six months to end of June versus a 11.4% rise in its composite benchmark.
Over the period, two new managers were introduced to the trust. Matthews Asia replaced Comgest to manage an Asia Pacific including Japan mandate comprising 9.5% of the assets, while Heronbridge replaced Newsmith on a 5.3% UK equity mandate.
One of the major factor's behind the outperformance was Witan manager Andrew Bell's decision to increase the trust's exposure to Japan from 1% to 7% on the back on 'Abenomics'.
Bell (pictured) is anticipating a tricky second half as market conditions remain far from certain.
'The two principal risks to the new-found confidence of equity investors are a significant rise in bond yields (putting pressure on valuations and raising the cost of debt) and disappointment of hopes for economic growth (undermining earnings),' Bell told the market.
'The protective buffer of cheap valuations has been eroded by the recovery in equity prices. Although equities appear cheaply rated relative to deposit rates and yields on government bonds, on most assessments the latter are well below normal levels - appearing cheap compared with something which is expensive offers limited protection if the market starts to sell bonds rather than buying equities.'
Numis analyst Ewan Lovett-Turner was impressed with the fund's performance in the first half.
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