Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Witan Investment Trust PLC (LSE:WTAN, Financial) reported a strong first half of the year with an 11% NAV total return and over 14% share price total return.
- The company's core managers outperformed the benchmark, with four out of six managers delivering significant margins above the benchmark.
- The Emerging Market portfolio, managed by GQG, performed exceptionally well, contributing positively to the overall results.
- Witan has maintained a consistent dividend growth, with the first half of 2024 marking the 50th consecutive year of dividend increases.
- The company successfully locked in over GBP 150 million worth of debt at an average rate of 3%, providing long-term financial stability.
Negative Points
- Witan Investment Trust PLC (LSE:WTAN) slightly underperformed its benchmark in NAV total return terms due to concentrated returns in a limited number of stocks.
- The Specialist portfolio faced headwinds, particularly in sustainable climate change technologies and investment companies, impacting overall performance.
- There was pressure on discounts in the investment company sector, partly due to investor caution and regulatory reporting impediments.
- The gearing level was reduced from 14% to 2% midyear, reflecting a cautious approach amid market uncertainties.
- The company's earnings per share were slightly lower at the reported level due to costs associated with the forthcoming merger with Alliance Trust plc.
Q & A Highlights
Q: How has Witan Investment Trust performed in the first half of the year given the economic backdrop?
A: Andrew Bell, CEO, stated that Witan's return was 11% in NAV total return terms and over 14% in share price total return terms, slightly behind the benchmark of 11.7%. The performance was influenced by concentrated returns in a few stocks, notably NVIDIA. Despite this, the Trust is slightly ahead post-June, with a 0.5% increase in inflation-adjusted terms.
Q: What were the key performance drivers in the portfolio for the first half of the year?
A: The primary driver was the rise in markets, with significant gearing in the first quarter. Witan started the year with 14% gearing, which was reduced to 6% midyear and is currently about 2%. This reduction was due to risk/reward shifts as markets priced in more good news.
Q: How did Witan's multi-manager approach perform?
A: The core managers outperformed the benchmark, with four of them significantly ahead. The most growth-focused manager, investing heavily in technology stocks like NVIDIA, performed strongly, as did the value-focused manager, Lansdowne. Two managers lagged but still delivered returns well above inflation.
Q: Can you elaborate on the Specialist portfolio's performance?
A: The Specialist portfolio had mixed results. The Emerging Market portfolio performed well, but the investment companies and sustainable climate change technologies faced headwinds, impacting overall performance. This was due to market skepticism and regulatory challenges affecting investment company discounts.
Q: What is the outlook for global equities considering current uncertainties?
A: Andrew Bell expressed cautious optimism, noting that interest rates are peaking globally, and inflation has likely peaked. He highlighted technological innovation and investment in sustainable energy as growth drivers. While geopolitical risks exist, the economic outlook is positive, with expected growth in developed economies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
