WTAN.L - Witan Investment Trust

Discussion in 'International Stock Markets' started by Marvan, Jul 16, 2021.

  1. Marvan

    Marvan Well-Known Member

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    Witan Investment Trust plc is a United Kingdom-based closed-end investment trust.

    The Company’s objective is to achieve an investment total return exceeding that of the Company’s benchmark over the long term, together with growth in the dividend ahead of inflation.

    It offers diversified exposure to global markets (principally equities) using a multi-manager approach.

    Its portfolio is diversified by geographical region, industrial sector and at the individual stock level.

    It invests in various sectors, which include basic materials, consumer goods, consumer services, financials, healthcare, oil and gas, technology, telecommunications and utilities.

    Its investment manager includes Artemis Investment Management LLP, Lindsell Train Limited, Lansdowne Partners (UK) LLP and Veritas Asset Management.
     
  2. Marvan

    Marvan Well-Known Member

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  3. Marvan

    Marvan Well-Known Member

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    Witan's Andrew Bell on why market recovery has further to go

     
  4. Marvan

    Marvan Well-Known Member

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    Witan is an old investmentvehicle (1909), you buy it, collect the dividends and that's it.

    There are some more like that in the UK.
     
  5. Marvan

    Marvan Well-Known Member

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    Monthly factsheet August 2021

    Witan’s NAV total return of 3.4% was in line with the benchmark’s total return. The share price total return was 3.2%.

    Over the course of 2021 to date Witan’s NAV total return (+16.1%) remains ahead of benchmark (+15.4%)

    Global markets continued their positive momentum in August with the MSCI ACWI Index posting a total return of 3.6%. ‘Growth’ equities led the way as concerns over the Delta variant continued to weigh on the demand for more cyclical ‘Value’ companies.

    The US (+4.1%) and, in particular, the high growth NASDAQ market (+5.3%), benefitted from this environment.

    Chinese equities, with a total return of less than 1%, were the laggards once again, as investors continued to digest the implications of the regulatory crackdown and a slowing economic growth rate.

    Witan’s NAV total return of 3.4% was in line with the benchmark’s total return. The share price total return was 3.2%.

    Over the course of 2021 to date Witan’s NAV total return (+16.1%) remains ahead of benchmark (+15.4%) despite some very changeable market conditions. Portfolio turnover was low, although adjustments were made in a number of areas.

    We added to our holding in Blackrock World Mining Trust, having previously reduced the position at higher prices. This position is currently 1.3% of Witan’s portfolio.

    Unilever is another company which has been owned by Witan for many years. Whilst this has been a good long-term investment, recent performance has been lacklustre, and this has allowed managers to increase exposure at a less onerous valuation.

    Other purchases include Illumina, a US-based biotechnology company specialising in gene-sequencing.

    Managers reduced exposure to two materials companies, Arcelormittal (steel) and Freeport-McMoRan (copper), following a period of strong performance. Both companies are retained in the portfolio by managers who believe they are well placed to benefit from the increased demand for the materials required to ‘greenify’ the global economy.
     
  6. Marvan

    Marvan Well-Known Member

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    Glasgow is currently hosting the 26th UN Climate Change Conference of the Parties or COP26 as it is more commonly known. It runs from 31 October – 12 November 2021 and is designed to bring together parties to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change.

    The UK is committed to working with all countries and joining forces with civil society, companies and people on the frontline of climate change to inspire climate action ahead of COP26.

    With such commitment from our government and those around the globe, James Hart our Investment Director shares his thoughts on the road to Net Zero and what it means for us:


    [​IMG] The fight against climate change is now central to the geopolitical agenda and is rapidly becoming a key consideration for financial institutions and investment companies, such as us at Witan.

    We have devoted significant resources to our engagement on this subject, both before and since becoming a member of the Institutional Investors Group on Climate Change (IIGCC) in 2019 and a supporter of the Transition Pathway Initiative in 2021. One of the recent areas of engagement with our managers is how they and their portfolio companies are assessing the challenges and opportunities of meeting the targets set by the Paris Agreement in 2015. We believe reaching Net Zero by 2050 is key to the long-term sustainability of our planet and will require significant investment. This is why we recently signed the 2021 Global Investor Statement to Governments on the Climate Crisis, which calls on governments to implement the essential policy framework to help investors contribute to this goal.

    We and the fund managers that manage money on our behalf take a holistic approach to responsible investment and so consider the whole value chain as well as the long journey to Net Zero. Whilst we own a number of clean energy companies in the portfolio, we will own companies which may not ‘score’ well on backward looking ESG metrics but are an integral part of the solution to whichever issue is being addressed. These companies produce materials, components or technologies which are essential to the transition and are therefore likely to benefit financially from the efforts to mitigate or adapt to ESG issues.

    Taking climate change as an example, we believe that a blunt exclusion policy to ‘greenwash’ a portfolio runs counter to meeting the goals set by the Paris Agreement and is likely to be detrimental to shareholder returns. Therefore, in addition to investments in Climate Change and Renewable Energy strategies (totalling over 5% of assets), our portfolio may contain mining companies (copper for electrification or nickel for battery storage), steel manufacturers (to make wind turbine towers or electric grids), paper and packaging companies (to address overuse of single-use plastics) and aerospace manufacturers (developing fuel efficiency in aviation). Our belief is that it is more important to focus on what a company’s contribution to the long-term global carbon reduction is, rather than to fixate on its historic carbon footprint – provided, of course, that these companies are ‘best-in-class’ and that there is a clear path to reduce emissions over time.

    Some of our investments which fall into this category include BlackRock World Mining Investment Trust, Freeport McMoRan, ArcelorMittal, Safran and Smurfit Kappa. These companies are significant contributors to the portfolio’s current carbon footprint and we therefore look for evidence of long-term positive impact and that ongoing engagement is leading to improvements in operational efficiency and social awareness.

    As discussions progress during COP26 and beyond, we and the managers that manage money on our behalf, will continue to develop our approach to climate change and will assess the investments held, pushing for change where necessary and reporting in the clearest way possible. Witan has continuously evolved over the last 112 years to meet the challenges and opportunities presented by an ever-changing environment. COP26 marks another step on this long journey and we remain committed to making the right decisions for our shareholders and for the planet and its people.

    James Hart
    Investment Director, Witan Investment Trust plc
    3rd November 2021

    https://mailwizz.pro-activeuk.com/index.php/campaigns/rh989br8hff75/web-version/va709wvx0jd3c
     
  7. Marvan

    Marvan Well-Known Member

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    COP26 has brought into focus the need for action on climate change with pledges by countries around the world to act to reduce carbon emissions and reliance on fossil fuels. This will create challenges but also opportunity as economies and companies adapt to the changes required. Witan has identified climate change as a key investment theme for our specialist portfolio and in 2019 invested in the GMO Climate Change Fund. Below GMO describe the opportunity and their approach to investing.

    [​IMG] GMO introduced its Climate Change Strategy in April of 2017 after conducting extensive research into the opportunities presented by efforts to mitigate and adapt to global climate change. Lead portfolio manager Lucas White and his team believe that climate change is not only among the most important issues facing investors today, but that the sector is ripe with exceptional opportunities as the world mobilizes to address it.

    The opportunities

    The world needs a massive amount of investment to head off climate change. We believe decarbonizing the economy and overhauling our energy grids will require trillions of dollars, creating secular growth tailwinds in the climate change sector that are likely to last for decades. Many climate solutions are already the lowest cost choice, and this is driving transformational change.

    [​IMG]

    As of 2017 | Source: DNV GL
    Projections are subject to change and may vary significantly from the data shown.

    Secular growth in and of itself does not make investing easy. Understanding the big picture, global policies, the details of changing technologies, and the companies themselves is a tall order. The uncertainty about how things will play out can lead to large swings in sentiment and wide dispersions in expectations, all things that breed opportunities. Today, the opportunity in the climate change sector, as we define it, is more attractive than ever before. In fact, the GMO Climate Change Strategy traded at more than a 40% discount to the MSCI All Country World Index as of September 30, 2021, the largest discount since inception almost five years ago.

    [​IMG]

    As of 9/30/21 | Source: IBES, MSCI, GMO
    Valuation metric is price/forward earnings.

    GMO’s unique approach

    The GMO Climate Change Strategy invests in companies GMO believes are positioned to benefit, directly or indirectly from efforts to mitigate and adapt to climate change. We often find attractive opportunities in places that few others even consider, such as clean energy materials, forward-thinking utilities, and agricultural productivity. We are looking for pure-play companies with business models that truly combat climate change and its effects.

    [​IMG]

    A good example of the type of opportunity we are now finding attractive is in biofuels. Biofuels have a carbon footprint that can be 80%-90% smaller than oil-based fuels and even 40%-60% smaller than electric vehicles. Importantly, biofuels require little to no infrastructure investment which is a far cry from that required for electric vehicles. Biofuels are increasingly becoming an important alternative to carbon-based fuels, and we believe this overlooked industry is poised for tremendous growth over the next decade.

    The importance of a value orientation

    Where there is growth and innovation, and both are in plentiful supply in the climate change sector, there will be hype and hysteria which often leads to disappointing returns for investors. Success requires a disciplined value approach and an understanding of the evolving industry and company fundamentals. Perhaps the best-known electric vehicle manufacturers today are Tesla and Rivian. The valuations of both are sky-high and, in our experience, few companies ever live up to this kind of hype. We believe better investments can be found in the materials required to manufacture electric cars and batteries. For example, electric vehicles require up to four times more copper than gas powered cars, and copper producers will benefit substantially from the adoption of electric vehicles. Copper producers trade at low multiples and may offer better potential returns.
    [​IMG]

    As of 2017 | Source: US Geological Survey, copper.org, Financial Times, Bloomberg New Energy Finance, GMO.

    [​IMG]

    As of 9/30/21 | Source: IBES, GMO
    The specific companies identified should not be viewed as current or past recommendations of GMO. The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable.

    Looking ahead

    Climate change is increasingly impacting the global economy and our daily lives, and the world is clearly mobilizing to address it. While global economic profitability drives the broad equity market, profitability associated with the clean energy transition and efforts to mitigate and adapt to climate change will drive returns for the climate change sector. At a time when global markets look expensive and expected returns are generally low, there are unique opportunities for strong returns for decades to come in the climate change sector. [​IMG]

    GMO’s Focused Equity team,
    25th November 2021


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  8. Marvan

    Marvan Well-Known Member

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  9. Marvan

    Marvan Well-Known Member

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    [​IMG]

    Newsletter
    February 2022
    [​IMG]

    In 2021, investors favoured (at different times) either high growth technology stocks or highly cyclical businesses. Unusually, managers such as Lindsell Train, whose high conviction portfolio is invested in durable, cash-generative business franchises, failed to keep pace with the market last year. We asked Lindsell Train, who manages 15% of Witan’s assets in a global portfolio, to outline their thoughts for 2022, with a particular focus on how some of their investee companies might fare in the months ahead.

    Optimism despite some recent challenges

    [​IMG] We are looking forward to 2022 with optimism. Why? Because the central pillar of our investment philosophy is that investors undervalue durable, cash-generative business franchises – and, in our opinion, rarely have the relative values of the companies we invest in looked so alluring. Our confidence in their durability and long-term relevance remains undimmed and perhaps even enhanced as the vast majority have borne the challenges of the pandemic to consolidate and extend their market positions.

    The pandemic has brought forward more change, and at a faster pace, than is usual as consumers have been forced through circumstance to embrace different ways of doing things, often with the aid of new technology. The obvious beneficiaries in the short term are the technology companies. And understandably the relative performance of stock markets over the recent past has reflected this. In comparison, the performance of many of the types of companies we favour has looked pedestrian (and in a number of cases, downright disappointing). In the longer term, however, we would contend that these franchises and brands will be the winners, using the services and functionality that new technology empowers. These companies have the added advantage of heritage, having on average survived for more than 100 years, which means that they have encountered wars, depressions, recessions, digital transformations and more topically of course a devastating pandemic. This strengthens our belief that these companies have the wherewithal to successfully navigate future challenges.

    Heritage across the portfolio

    By way of example, three of the 22 companies in which we invest for Witan - all three with significant heritage (as shown below in brackets by the year the company or its lead brand was started) - have met the challenges of the pandemic in the following ways:
    • Diageo (1759), faced with the intermittent closure of clubs and bars, has extended its reach with the consumption of premium spirits at home, boosting overall sales and profits. It was notably one of the few companies within its sector to maintain advertising and promotional spend over the course of the pandemic and looks set to benefit in the coming years as a result, with annual organic sales growth over 2023-25 anticipated to be 5-7%¹, representing a meaningful acceleration compared to previous years.
    • Nintendo (1889) has taken advantage of elevated demand in lockdowns to spread its franchise. The company has now sold over 92m Switch consoles and nearly 700m associated games, making it one of their most successful console generations ever. A significant development over this period was that nearly 50% of Nintendo’s software sales were digital rather than physical, up from 17% five years ago. Not only does this channel carry a higher margin, but it also enables Nintendo to form stronger relationships with its fans.

      [​IMG]
      Source: Nintendo Company filling
      Nintendo Switch Sales data as of June 2021. Nintendo Account Update data, since launch of Switch (March 2017) to 30 September 2021.
    • Disney’s (1923) new streaming services have similarly received an unprecedented boost, which has allowed it to be quickly established as one of the two leading services in this still nascent industry. The company’s Disney+ service now has 118m subscribers just over two years after launching. To put that in context, it took Netflix ten years to accrue 100m+ subscribers. In addition to already owning some of the highest quality and most recognizable intellectual property, Disney also has the size and scale to dramatically outspend its competitors, with $33bn in planned content expenditure in 2022 (nearly double that of Netflix).
    • [​IMG]
      Source: Disney+
    ‘Young’ companies with dominant platforms

    Although we are comforted by heritage, we will sometimes invest in newer businesses where we can see high barriers to entry and where we feel confident that the business can prosper over the long term. One such example is the youthful PayPal, founded in 1998. Covid acted as an accelerant for many tech-driven, platform businesses around the world and PayPal succeeded in strengthening its competitive position, with the number of PayPal accounts growing by 41% and total payment volumes up over 90%. Another platform business we like is Hargreaves Lansdown, founded in 1981, where assets, customers and trading volumes are all up strongly. Indeed, since the onset of Covid, Hargreaves has onboarded over 375,000 new clients – this is exponential growth when you consider it took the company 30 years to first reach this number!

    Broader market performance?

    In summary, we will continue to focus our portfolios on companies that we judge to be exceptionally durable, often underlined by a long heritage. Meanwhile, we expect the performance of global markets to broaden away from its recent overwhelming focus on technology and cyclicals, to the benefit of many of our holdings. As Warren Buffet said “Stocks are simple. All you do is buy shares in a great business for less than the business is intrinsically worth, with managers of the highest integrity and ability. Then you own those shares forever”. [​IMG]

    Lindsell Train Investment Team,
    2nd February 2022.
    ¹Source: Diageo (2021 Capital Markets Day presentation).

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  10. Marvan

    Marvan Well-Known Member

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    After 2 years, I also left Netflix (two weeks ago) because to many unrealistic and boring movies.....

    And always watching the same good movie because there are no new ones is a waste of time.
     
  11. Marvan

    Marvan Well-Known Member

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    They do the work for me, i collect the dividends and thats it.
     
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  12. Marvan

    Marvan Well-Known Member

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    Down to GBp 218.50, so i increased my position.
     
  13. Marvan

    Marvan Well-Known Member

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    Witan Investment Trust plc has released its Annual Report.

    Key highlights of 2021 were as follows:
    • Full-year NAV total return of 15.8%. The benchmark returned 19.9%.

    • Ten-year NAV total return of 233%, compared with 210% for the benchmark.

    • £10.7m NAV uplift from share buybacks offset the majority of the Company’s ongoing charges during the year.

    • Dividend increased by 2.8% to 5.60 pence, more than double that paid in 2011 and an unbroken run of increases since 1974.

    • Following commitment to Net Zero Asset Managers initiative, new target adopted that our portfolio will consist entirely of sustainable businesses by 2030 or earlier.
     
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