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Analysis of Witan Pacific Investment Trust Plc- Fund Management - Essay Example
Author : watersdianna
Finance & Accounting
Pages 12 (3012 words)
The reason for analyzing Witan Pacific is its objective of investing in emerging markets in Asia, especially when the western economies are facing economic turmoil. The motivation for various global funds to invest in emerging markets comes from the fact that growth potential is high and there is less correlation between the emerging markets and developed markets (Arouri, et al., 2010, p. 20). …
Witan Pacific is an investment trust that was established in 1907 as General Investors & Trustees Limited (GIT). The company then used to invest in a diverse range of assets. Following the 1929 market crash, the company shifted from equities to Treasury Bills, cash and British Government Securities. GIT merged with City and Gracechurch Investment Trust in 1975. GIT was renamed F&C Pacific Investment Trust in 1984. In 2005 it adopted a multi-manager approach where Witan Investment Services was entrusted with management of the operations and Aberdeen and Nomura became the investment managers of the company (Witan Investment Services Limited, 2012).
The investment objective of the fund is to give its shareholders a portfolio of investments with a balance of assets in the region of Asia Pacific with the aim to outperform MSCI AC Asia Pacific (Witan Pacific, 2011, p.1).
In order to achieve the aim and objective, the fund has devised a set of strategies:
In order to diversify risk and add value for investors, active multi-manager approach is used.
The company faces the foreign currency exchange risk and equity market risks in emerging markets such as settlement risks with regional exchanges. Other risks include selection of investment managers and other generic risks related to specific country. ...