Witan Pacific’s net asset value total return was 17.6% over the year to the end of January 2015, just ahead of the 17.1% return on the benchmark (MSCI All Country Asia Pacific Free Index). The share price return was 16.6% as the discount widened from 11.7% to 12.7%. The dividend was increased from 4.45p to 4.55p despite a fall in earnings to 3.98p from 4.41p. They say the earnings fall is largely down to the strength of Sterling.
Two of the appointed Managers, Aberdeen and GaveKal, outperformed during the year, with returns of 20.8% and 22.4% respectively. Matthews, which had outperformed the previous year was 1.0% behind the index this year, with a total return of 16.1%.
They say Aberdeen’s strong performance was almost entirely accounted for by its stock picking and investment positioning in Japan and India. Its Japanese holdings appreciated by 10% more than the local index. Aberdeen was overweight the strongly performing Indian market and picked stocks there which performed even better. A detractor was Australia where holdings in mining stocks such as BHP and Rio Tinto performed weakly. Elsewhere in Asia, smaller positives and negatives balanced out. Aberdeen has outperformed by 3.0% per annum since appointment, with a compound total return of 11.6% per annum.
Matthews’ orientation towards dividend growth and mid-sized stocks was less in favour, leading to modest underperformance over the year. Performance was held back by weakness in its largest holding, Japan Tobacco on concerns about its exposure to Russia. This offset other good stock selections in Japan with stocks such as Pigeon Corporation and Hoya Corporation. Matthews has outperformed by 1.6% per annum since appointment, with a compound total return of 11.8% per annum.
Witan Pacific say GaveKal’s portfolio performed very well in the second half of the financial year, more than reversing earlier weakness. Its selection of countries across the region and investment selection in the Japanese and Australian markets performed very well. Notable stock-specific successes included its holdings in Indian financial stocks and companies such as Megaworld Corp in the Philippines and Guangdong Investment Ltd in Hong Kong.
WPC : Witan Pacific beats benchmark as two in three managers perform well