MULTI-MANAGED
approach to Asia
Witan Pacific plc (“Witan Pacific”) is a multi-managed investment trust that provides investors with a portfolio of equities invested in the Asia Pacific region including Japan. The pan-Asian investment focus gives investors representation in Asia and Japan without the challenge of making their own asset allocation within these markets, while the multi-manager approach has the added advantage of offering diversification of manager style as well as country, sector and stock.
The case for investing in Asia is well known - the Asia Pacific region accounts for more than half of all world trade; it contains two of the world’s fastest growing economies, China and India, Australia is rich in natural resources which have been heavily in demand globally, not forgetting the exposure you gain from the potential of South Korea, Hong Kong, Singapore, Taiwan, Thailand, Malaysia, Indonesia, the Philippines, and of course Japan. Although the Japanese economy has been languishing for more than a decade, Japan still accounts for over 37% of the MSCI AC Asia Pacific Index (as at 30.06.11). Japan is the biggest investor in China, directly and through companies the Japanese control in Taiwan and Japanese exports to Asian markets now account for approximately 55% of total Japanese exports (Source: Aberdeen Asset Managers Ltd (“Aberdeen”)). So Japan is increasingly inter-linked with the growth of its neighbours, through trade and commercial interests, and therefore offers investors indirect exposure to the Asian growth story.
Witan Pacific was founded in 1907 as “General Investors and Trustees Ltd”. It adopted its remit of specialising in the Pacific region in 1984. In 2005, it adopted a multi-manager approach, with Witan Investment Services Ltd as Executive Manager and appointed Aberdeen and Nomura Asset Management UK Ltd (“Nomura”) to manage the fund, sharing the same pan-Pacific mandate and splitting the assets. Aberdeen majors on its stock-picking ability and is generally underweight in Japan as compared with the index. By contrast, Nomura is more conservative in its approach. It pays more attention to regional weightings and therefore maintains a higher exposure to Japan. This blend of managers is intended to result in outperformance* over different market cycles as these two contrasting styles fall in and out of favour and reduce performance volatility. The results of our multi-manager approach can be seen in the performance table below.
As well as looking to generate capital growth Witan Pacific also aims to increase its dividends in real terms without jeopardising the broader total return objective. The increase in payouts from Asian companies, assisted by weakness in sterling relative to the yen and other Asian currencies has enabled the Trust to more than double its dividend in the past 5 years*. Its Total expense ratio is competitive when compared with other Asian investment trusts (1.2% including performance fees for 2010/11), and the trust also employs a buy-back policy to keep the discount in line with its peers.
So if you are considering investing in Asia, and want exposure to both Asia and Japan, there is only one investment trust that offers you coverage of the entire region but with the added advantage of multi-manager – Witan Pacific.
*Please remember, past performance is not a guide to future performance, and the value of shares and the income from them can rise and fall, so investors may not get back the amount originally invested.
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