Highlights
The NAV total return of 15.6% outperformed the benchmark's return of 13%
NAV total return over last five years was 18.7%, 3.7% ahead of the benchmark
Dividend increased by 10%, 7% ahead of the rate of inflation
Quarterly dividends introduced from 2013
The 38th consecutive year of increased dividends
Performance and Shareholder Returns
In 2012 Witan delivered a net asset value total return of 15.6%, 2.6% better than our benchmark, which gave a total return of 13%. The rise in 2012 more than made up for the fall in 2011, despite volatile expectations for economic growth and weaker trends in corporate profits. We were able to increase our dividend by 10%, while adding to our revenue reserves, marking the 38th consecutive year of rising dividends at Witan.
Despite the difficulties that have been placed before the global economy over the last 5 years, Witan has achieved an NAV total return of + 18.7%, which is + 3.7% ahead of our benchmark over this period.
Fluctuating economic hopes in 2012 resulted in markets displaying some of the rollercoaster characteristics of the previous two years. A strong first quarter was largely reversed in the early summer months, before a more positive trend became established in the second half of the year. The two principal drivers of the strong returns were more pro-active official policies to sustain economic growth, acting on the dry tinder of the low equity valuations which prevailed at the end of 2011. Although arguments will continue over the policy of quantitative easing (central banks printing money to buy government bonds) it has undeniably helped offset the negative effects of contraction in the banking sector and kept interest rates low, which benefits borrowers (including, of course, governments).
2012 was a reminder that buying assets at low valuations gives a degree of fundamental support, even during periods of disappointing economic news. The positive returns for equity investors were assisted by a number of feared events which did not happen: Middle Eastern conflict did not lead to a spike in oil prices, the Euro did not implode and China did not slip into recession. Also on the positive side, inflation fell worldwide, the US housing market pulled out of a 6 year recession and Northern European governments showed a greater willingness to incur the costs of buying time for Southern European countries to reform their economies.
