Witan H1 NAV flat on equites 'that went nowhere'

Witan Investment Trust said its first half net asset was flat against the second half of 2017 as equity markets went “almost nowhere” during the term.

The interim dividend was increased to 10.5p per share, up from 9.5p. Total shareholding returns, including dividends, rose 2% over the six months.

“Equity markets travelled a long way to go almost nowhere during the first half of 2018,” the company said.

“The mood proved changeable, ranging from New Year euphoria over US tax cuts and synchronised global growth, concerns about renascent inflation and Fed tightening, growth disappointment, strong earnings, renewed growth optimism, concern about energy prices and, latterly, political worries centred on US trade policy and European cohesion.”

Witan said the economic backdrop mid-year shows “relatively strong growth in the US and moderate growth elsewhere, with inflation higher than a year ago but not seemingly accelerating. In isolation, these are positive conditions for global equities”.

“The main global uncertainties of oil prices and trade policy are both compounded by their connection with unpredictable policy formation emanating from Washington,” the company said.

“If the headlines about trade tariffs ultimately prove to be a form of negotiation by foghorn, the fears that tariffs will raise inflation, disrupt global supply chains and deter investment will recede.”

“Similarly, if other oil producers can replace the lost production from Iran and others, the drag on growth from higher oil prices will peak and may reverse.”

“In the UK, the Brexit process appears to be inching erratically towards a limited separation that maintains important industrial links with an extended transition period for changes in other areas.”

“As the end-point for negotiations looms closer, economic considerations appear to be pushing policy in a more pragmatic direction, despite the protests of zealots on both sides of the Channel.”