Giant investment trust Witan plans to scrap its current benchmark and replace it with a radically altered strategic allocation when it switches to an open architecture structure later this year.
The new allocation, which will replace the current 60 per cent FTSE All-Share and 40 per cent FTSE World excluding UK index benchmark, will form the basis for the equity mandates which will be awarded in the autumn.
Beauty parades to select the managers will be held throughout June and July, after which current manager Henderson will discover what – if any – mandates it will be awarded.
The new allocation will see the £1.35bn trust's assets invested 40 per cent in mainstream equities, down from the 60 per cent average of last year. The US equity weighting will fall to 10 per cent from 26 per cent while two previously excluded sectors – global equities and absolute return – will comprise 15 per cent and 10 per cent of the trust respectively.
European, Japanese and Pacific equity weightings will also rise and for the first time the trust will invest in UK smaller companies. Mandates will be awarded around September.
Marketing director James Budden says: “The danger with benchmarking is that fund managers tend to follow them – they do not want to take bets when the market is falling. That is what has happened with Witan. We want to meet shareholders' desire for absolute returns, which is why we have made this move.”