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Witan and F&C say Mom will restore investor confidence

The boards of the Witan and F&C investment trusts believe their multi-manager strategies will revive investor confidence in investment trusts.

F&C recently said it will outsource the US large-cap part of the trust. This part of the portfolio currently has little scope to deviate from the benchmark, which has led to disappointing returns. The new manager will be employed to pursue a more aggressive strategy than F&C can offer and it expects this to boost returns.

In contrast to F&C’s phased approach Witan fully embraced the concept of manager of managers last September. It outsourced various parts of the trust to five different managers while keeping Henderson as manager for its UK equity portfolios.

Although Witan may experience the same problems as any other investment trust, the board feels the effects of these will be diluted, as for every underperforming manager there should be one that will outperform. The board thinks its switch to multi-manager was a contributory factor in the trust’s 9.6 per cent share price rise last year.

Witan investment trust marketing director James Budden says: “Manager of managers will boost investor confidence as it shows a board is prepared to go the extra mile for shareholders.

“It shows that you are not looking at managers just because they manage investment trusts and that you are prepared to look outside the UK for managers who can deliver the best returns. That kind of progressiveness can only be a good thing.”

F&C investment trust manager Jeremy Tigue says: “If you choose the right selection of managers you should get better returns for investors, but manager of managers will be more expensive if you do not choose the right managers.”

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