Witan investment trust has appointed Thomas White International as its third global manager to run 10% of the multi-manager fund.
The move follows the £1.5bn trust’s recent strategic review and backs up Witan’s decision to progress towards a more global view. Thomas White’s appointment also supports a shift by the trust from beta to alpha generation in terms of investment strategy with active global managers now running 35% of the trust’s overall portfolio.
Chicago-based boutique Thomas White International will manage a new £150m global mandate funded mainly by raising cash from Witan’s enhanced index portfolios. This is a strategic investment decision not a reflection of poor performance, the trust says.
Meanwhile, the UK mainstream portfolio mandate has been cut from 40% to 32% (Witan’s new UK weighting 38.8%) while the North American mandate is down from 10% to 6% (Witan’s new US weighting 23.2%). The balance of these cuts has been distributed to the Asian portfolios.
From the October 1 2007 the trust’s benchmark will also change from 50% FTSE All Share Index / 50% FTSE World (ex UK) Index to 40% FTSE All-Share Index; 20% FTSE All World North America; 20% FTSE All World Europe (ex UK); 20% FTSE All World Asia Pacific.
This change recognises the world economy in GDP terms is increasingly split into three trading areas: the Americas, Europe and Asia Pacific and within these regions, a large proportion of trade flows are internal. The Witan board feels an equal weighting of all three areas in the trust’s benchmark would offer a truer gauge of its performance.
Jim Horsburgh, CEO of Witan says: “The appointment of Thomas White and subsequent portfolio rebalancing means that Witan has now a greater proportion of its assets in alpha generating strategies and a greater exposure to global equities than ever before.
“The Board considered it expedient to reassess the Trust’s benchmark using the GDP of three key trading areas – North America, Europe and Asia – as points of reference rather than weightings within world indices which largely reflect the past performance of stock markets. This new benchmark should provide a better yardstick for investors moving forward.”
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