Witan Investment Trust : slightly ahead of its benchmark in a slow first half of 2018

During the six months ending 30 June 2018, Witan Investment Trust's total net asset value (NAV) return was 1.11%, marginally ahead of the benchmark* performance of 1.06%.

Further highlights of the 2018 half year results, published today, are:

• The share price total return was 2.0% as Witan's shares narrowed from a discount to NAV per share of 1.6% at the end of 2017 to 0.7% at the end of June 2018.
• A second interim quarterly dividend of 5.25p per ordinary share will be paid in September. Total dividends paid in respect of the period are 10.5p per ordinary share (2017: 9.5p).
• Eight of the ten external managers outperformed, as did the portfolio of direct holdings.

Harry Henderson, Chairman of Witan Investment Trust said:

'Equity markets travelled a long way to go almost nowhere during the first half of 2018. This period of consolidation, which follows two years of very strong gains in sterling terms, appears healthy, provided that the adverse political influences do not tip the world into growth disappointment or recession.

During the first half of 2018, Witan's net asset value (NAV) total return was 1.14%, taking the par value of our debt, and 1.11% taking debt at fair value. This was marginally ahead of the benchmark's return of 1.06% during the period. Over the longer term, performance is more significantly ahead, with a 5 year NAV total return performance of 86.3%, compared with 69.4% for the benchmark.

Eight of the external managers outperformed their benchmarks, while two underperformed. The strongest gains came from the three UK managers (up by between 4% and 7%), with Veritas (3%) the strongest of the overseas managers. The Direct Holdings portfolio also outperformed, with a gain of 3%.

The share price total return of 2.0% was ahead of the NAV total return, due to a further narrowing of the discount, to 0.7%.

The economic backdrop mid-year shows relatively strong growth in the US and moderate growth elsewhere, with inflation higher than a year ago but not seemingly accelerating. In isolation, these are positive conditions for global equities.

The main global uncertainties of oil prices and trade policy are both compounded by their connection with unpredictable policy formation emanating from Washington. If the headlines about trade tariffs ultimately prove to be a form of negotiation by foghorn, the fears that tariffs will raise inflation, disrupt global supply chains and deter investment will recede.

In the UK, the Brexit process appears to be inching erratically towards a limited separation that maintains important industrial links with an extended transition period for changes in other areas. As the end-point for negotiations looms closer, economic considerations appear to be pushing policy in a more pragmatic direction, despite the protests of zealots on both sides of the Channel.

2018 appears to mark a general turning point in global monetary policy, although tightening remains gradual. The combination of gradually rising interest rates and reducing central bank demand for bonds is a slow-burn fuse for bond markets, given their dependence on central bank buying since 2009. Consequently, the risks appear to lie in the direction of higher yields.

Equities remain relatively lowly valued compared with bonds and absolute valuations have moderated due to the rise in corporate earnings in 2018. If the reason for rising rates is that the world economy is moving out of the convalescent ward towards greater health, higher rates are more reassuring than otherwise. The main proviso is the avoidance of recession, whether caused by rates rising too high due to central bank misjudgement or because of a trade war initiated by the US.

We are attentive to, but do not exaggerate the importance of, the various political risks. We remain focused on active stock-selection and a prudent but opportunistic attitude to risk in order to add value for Witan's shareholders.'

A video interview with Andrew Bell, Chief Executive Officer of Witan Investment Trust, discussing the 2018 interim results can be viewed on the Company's website here

- ENDS -

*Since 01.01.2017, the Witan Investment Trust benchmark has been a composite of the following equity regions: UK 30%, North America 25%, Europe (ex UK) 20%, Asia Pacific 20% and Emerging Markets 5%. From 01.10.2007 until 31.12.2016, Witan's benchmark was a composite of UK 40%, North America 20%, Europe (ex UK) 20% and Asia Pacific 20%.

For further information please contact:

Andrew Bell, Chief Executive Officer

Witan Investment Trust plc

Tel: [phone]

[email protected]

James Hart, Investment Director

Witan Investment Trust plc

Tel. [phone]

[email protected]

Alexis Barling, Director of Marketing

Witan Investment Trust plc

Tel. [phone]

[email protected]

Notes to Editors

Witan Investment Trust plc

Established in 1909, Witan is one of the UK's largest investment trusts, managing £2.0bn on behalf of over 21,000 investors (source: Witan, as at 30.06.2018). Witan operates a multi-manager structure and currently has 10 principal external managers with up to 12.5% allocated to specialist funds and newly established managers by the executive investment team. Witan is listed in the 'Global Growth' sector and is a member of the FTSE 250 index. Registered as an Investment Company in England No 101625. For further details please visit www.witan.com