Witan ditches Heronbridge after seven years as part of £230m shake-up

Global investment trust has been shifting its portfolio away from UK equities

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The Witan Investment Trust has ditched a £54m UK equity mandate plus a US equities ETF and handed the resulting $300m (£227.2m) to active US managers as it repositions its portfolio to become more global.

The £1.5bn investment trust has allocated $200m, or 8% of its assets, to California-based WCM Investment Management, which will invest in a portfolio of 30 to 40 names. A further $100m has been handed to Jennison, which will create a portfolio fo 35 to 45 names.

The funding for the new mandates mostly came from the sale of a US equity ETF, which Witan said had been used as a temporary means of maintaining market exposure. The remaining balance was funded by the sale of a £54m UK equity portfolio managed by Heronbridge Investment Management.

Heronbridge had managed money for Witan for seven years.

Witan chief executive Andrew Bell said: “The new global asset allocation that Witan introduced from January incorporates greater exposure than before to faster growing parts of the world and economic sectors. These appointments represent an important further stage in implementing that policy, providing a degree of specialism that complements the approaches of our other managers.”

In January, Witan had switched up its £180m mandate with Lindsell Train from UK equities to global equities as it aimed for more diverse geographic exposure. Then in June it dropped SW Mitchell and Crux as it made a complete exit from European equity mandates, instead aiming to get its exposure to the region via global mandates.

Bell added: “Witan’s performance had a disappointing start to 2020, when the Covid-19 lockdown measures affected the portfolio adversely, as reported on in detail in our interim results last month. Since May, modest outperformance has resumed, although this is subject to the usual uncertainties and caveats and neither good nor bad performance should be extrapolated.”

In the year to the end of August, Witan’s share price has fallen 17.3% compared to 3.4% gains in the FTSE World benchmark. The Investment Trusts Global sector has returned 0.5% over the period.

See also: Witan declares £70m reserves will spare its dividend from coronavirus clipping

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