Witan Pacific’s results for the year ended 31 January 2016 show it managing to outperform its benchmark, the MSCI All Country Asia Pacific Index, by a little – the NAV return for the fund was -5.6% against -5.9% for the index. Shareholders did better than this though with a return of -3.5% as the discount narrowed from 12.7% to 10.9%. The dividend was increased from 4.55p to 4.65p.
Looking at the performance in more detail, Matthews and Gavekal outperformed the benchmark with returns of +3.5% and -4.5% respectively while Aberdeen’s portfolio declined 12.3%.
In Matthews’ portfolio, Japan Tobacco, the company’s largest holding and greatest overweight position, enjoyed a significant recovery in fortunes this year. Shenzhou International, Suntory Beverage and LG Chemical all made a significant contribution to performance.
Aberdeen enjoyed some notable successes, including Taiwan Semiconductor, Japan Tobacco and Seven & I Holdings, while exposure to mining shares (BHP Billiton and Rio Tinto), Singaporean industrial shares (Keppel Corp) and financial shares (City Development, DBS Group and Oversea-Chinese Bank) and Hong Kong (Li & Fung, Hang Lung and Swire Pacific) detracted from performance.
Gavekal’s portfolio manager held an increasingly cautious view on markets as the year progressed and retained a meaningful weighting in Asian bonds and even cash at various times. At the year end, the combined exposure to bonds and cash was approximately 40% (2015: 25%). Aside from the contribution made by the allocation to fixed interest securities, the equity portfolio benefited from some judicious asset allocation decisions to China and South Korea. LG Household & Health, Cheung Kong and Murata Manufacturing were particularly successful stock selections.
WPC : Witan Pacific beats benchmark despite significant underperformance in Aberdeen portfolio