Witan still bullish

15th Mar 2010 07:12

Investment trust giant Witan’s investment performance beat its benchmark index in 2009 after calling the bottom of the market a month early in February.‘Last year my Chairman's Statement concluded by pointing out that in the past, when equity markets have fallen by more than 20% in any twelve month period, in most instances there has been a significant rise the following year,’ said the trust’s chairman Harry Henderson.Backing this view, the company reintroduced gearing into the Trust in February and was rewarded by a 25.9% total return in net asset value in 2009, versus a 24.5% return from the company’s benchmark, which is a blend of the FTSE All-Share (40%), plus 20% weightings for the FTSE All-World indices (in sterling) for North America, Europe (excluding UK) and Asia Pacific Performance was enhanced by the company’s share buy-back programme; the company bought back 5.1% of the shares it had in issue at the beginning of 2009.The company has maintained its exposure to the UK but has shifted the emphasis towards larger companies which make more of their revenues overseas.‘Equities are more favourably valued than they were ten years ago with the MSCI [Morgan Stanley Capital International] forward earnings multiple nearly half, the dividend yield higher by a factor of two and the risk free rate of return some 40% lower. Despite the uncertainties surrounding the future, equity markets appear undemandingly valued, particularly given a backdrop of low income yields from deposits and government bonds,’ Henderson said.The dividend has been increased for the 35th year in succession. The board has recommended the payment of a second interim dividend of 6.2p in lieu of a final dividend, with the payment rushed through ahead of the change in the tax rate for higher earners.The total dividend for 2009 is 10.5p, up from 10.2p the year before.