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Stock Analysis & ValuationWitan Investment Trust PLC (87IP.L)

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Previous Close
£52.50
Sector Valuation Confidence Level
High
Valuation methodValue, £Upside, %
Artificial intelligence (AI)n/an/a
Intrinsic value (DCF)n/a
Graham-Dodd Method2.90-94
Graham Formulan/a

Strategic Investment Analysis

Company Overview

Witan Investment Trust PLC (LSE: 87IP.L) is a UK-based closed-end investment trust focused on delivering long-term growth in income and capital through a diversified, multi-manager approach to global equities. The trust invests across various sectors, including basic materials, consumer goods, financials, healthcare, industrials, technology, and utilities, ensuring broad exposure to global markets. Managed by Witan Investment Services Limited (WIS), the trust benefits from active portfolio management and strategic asset allocation. As part of the Financial Services sector, Witan stands out for its multi-manager strategy, which leverages external expertise to optimize returns. With a strong emphasis on geographical and sectoral diversification, Witan appeals to investors seeking balanced global equity exposure with income potential. The trust’s commitment to shareholder returns is reflected in its dividend policy, making it a compelling option for income-focused investors in the UK and beyond.

Investment Summary

Witan Investment Trust PLC offers a compelling proposition for investors seeking diversified global equity exposure with an active management approach. The trust’s multi-manager strategy enhances its ability to capitalize on market opportunities while mitigating risks through diversification. With a solid revenue of £207.95 million and net income of £181.48 million in FY 2023, Witan demonstrates robust financial health. The trust’s dividend yield, supported by a dividend per share of 1.7p, adds to its attractiveness for income-seeking investors. However, the presence of total debt (£239.76 million) and a beta of 0 (indicating potential lack of correlation with broader market movements) may warrant caution. Investors should weigh the benefits of diversification and active management against the costs associated with a multi-manager structure.

Competitive Analysis

Witan Investment Trust PLC differentiates itself through its multi-manager investment strategy, which allows it to leverage specialized external managers for optimal portfolio performance. This approach provides flexibility and access to diverse investment styles, enhancing risk-adjusted returns. The trust’s broad sector and geographical diversification further strengthen its competitive positioning, reducing reliance on any single market or industry. However, the closed-end structure may lead to discounts or premiums to net asset value (NAV), which can impact investor returns. Compared to peers, Witan’s active management and diversified portfolio offer a unique value proposition, though its performance is contingent on the effectiveness of its selected managers. The trust’s ability to maintain consistent dividends and capital growth in varying market conditions underscores its resilience, but investors must consider fees associated with multi-manager strategies, which could erode returns over time.

Major Competitors

  • Scottish Mortgage Investment Trust PLC (SMT.L): Scottish Mortgage is a leading global investment trust with a focus on high-growth equities, including technology and private companies. Its concentrated portfolio offers higher growth potential but comes with increased volatility. Unlike Witan’s multi-manager approach, Scottish Mortgage relies on in-house management, which may limit diversification benefits.
  • F&C Investment Trust PLC (FCIT.L): F&C Investment Trust is one of the oldest and largest global investment trusts, with a diversified portfolio similar to Witan. However, F&C emphasizes a more passive, index-aware strategy, contrasting with Witan’s active multi-manager approach. F&C’s lower fees may appeal to cost-conscious investors.
  • Mid Wynd International Investment Trust PLC (MWY.L): Mid Wynd focuses on global growth opportunities with a thematic investment approach. Its strategy is more concentrated than Witan’s, targeting specific trends like automation and healthcare. While this can lead to higher returns, it also increases risk compared to Witan’s diversified multi-manager model.
  • Alliance Trust PLC (ATST.L): Alliance Trust employs a multi-manager strategy similar to Witan but with a stronger emphasis on sustainable investing. Its ESG focus differentiates it from Witan, attracting socially conscious investors. However, Witan’s broader sectoral diversification may offer more stability in volatile markets.
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