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Witan Pacific plans more tactical gearing

Witan Pacific Investment Trust will consider making greater use of tactical gearing over the coming year as it seeks to enhance returns for investors.

Over the past five years, the £138m company’s fully invested gearing has ranged between zero and 5 per cent.  At the start of the year, it had a borrowing facility of £4m and during the course of the year it borrowed an extra £5m to further enhance returns in rising markets.  At the end of the year the company was effectively ungeared. 

In its final results today, Witan Pacific reported an outperformance in net asset value terms of 3.8 per cent relative to its MSCI AC Asia Pacific Free Index benchmark with a total return of 33.4 per cent for the year as at January 31.  The company attributed outperformance to its underweight exposure to Japan over the past year. 

Last year the company underperformed its benchmark in terms of NAV total return by 1.8 per cent with a -19.7 per cent return, compared with the sterling denominated index fall of -17.9 per cent.

The board is recommending a final dividend of 2.10p per share, a 13.5 per cent increase on the ordinary recurring dividend paid last year and double the dividend per share over the past 5 years.

In 2005 Witan Pacific shifted to a multi-manager structure with Witan Investment Services as executive manager.  The company’s investments are managed equally by Aberdeen Asset Managers and Nomura Asset Management. 

Witan Pacific chairman Gillian Nott says: “Although the Japanese equity market appears relatively cheap, the catalyst to unlock this value and improve investment returns remains elusive.

“We will continue to review the appropriate balance of investment styles and geographical exposure to deliver benefits for shareholders from what we believe to be the Asia-Pacific region’s enduring growth story.” 

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