80% of Witan managers outperform in first half

11 of 13 managers running Witan Investment Trust mandates outperformed over the first half of 2010, with the overall vehicle beating its benchmark by 1.9%.

For the six months, the multi-manager trust produced NAV performance of -1.9%, while its composite benchmark fell 3.8%.

The two relative underperformers were Wellington in Europe after a strong 2009 and Comgest in Asia, whose fundamental value-based approach lagged its Asian benchmark.

As a result, Witan removed Wellington over the period, asking existing British manager Marathon to take on a pan-European mandate.

Andrew Bell, the chief executive officer of Witan, said the highlight of the 11 outperformers was Southeastern’s global mandate while Varenne’s concentrated pan-European portfolio also performed outstandingly. 

Over the six months, the team introduced several changes to improve performance, including a new portfolio of quoted investment companies run by Bell himself.

This allows the trust to invest directly in undervalued assets and areas that are too specialised to merit a formal segregated mandate, such as private equity and distressed debt. (article continues below)

Meanwhile, Bell and team are also making greater use of index futures to capitalise on outbreaks of volatility, allowing them to alter asset allocation without interfering with underlying managers.

Bell said the first half of 2010 has seen sharply fluctuating investor sentiment in response to monetary tightening by faster-growing economies and fiscal tightening by slower-growing regions. 

“During July optimism on corporate earnings outweighed recession worries and spurred a global equity rally,” he added.

“Despite this, sentiment remains fragile and the outlook for equity markets, in the short term at least, is continued volatility.”