Managers at the Witan Investment Trust (LSE: WTAN) have been working to produce returns for investors since 1909, and over this period, they have created hundreds of millions of pounds in value for shareholders.
For example, over the past decade, shares in the trust have produced a return of 271%, compared to a gain of 178% for its benchmark (a combination of global indexes).
I reckon this performance is set to continue for the foreseeable future as the team at Witan continues to seek out growing businesses around the world.
Indeed, one of the reasons why this business stands out to me over other trusts is its record of picking out-performers both at home and overseas, which gives investors plenty of diversification as we head towards the uncertainties of Brexit. UK investments make up just 35% of assets. North American investments account for 24%, and European stocks make up 20% of the portfolio.
Dividend record
Another reason why I’m attracted to the firm is its record of dividend growth. Every year for the past 43, Witan has consistently paid and increased its dividend.
For 2018, the company is on track to distribute 23p per share according to my figures, indicating a dividend yield of 1.9% is on offer. This might not seem like much, but in my view, the record of dividend growth more than makes up for the below-market yield.
Market-beating income
Alongside Witan, I’m also interested in River and Mercantile Group (LSE: RIV).
This small-cap investment management firm has more than doubled profits over the past five years as revenues have increased at a compound annual growth rate of 20% since 2013.
For the three months ending 30 September 2018, according to a trading update published by the firm today, “strong net inflows” resulted in an increase of 3.3% in fee-earning assets under management. Market volatility has impacted demand for the group’s services, but management is confident that the business is “highly diversified and therefore the effect on our overall numbers will likely be more muted than it is for others.“
This cautious statement seems to suggest that investors should expect River’s earnings growth to slow for 2018, which appears unavoidable — the company can’t control the markets after all. Analysts had been expecting the firm to report earnings per share growth of 21% for fiscal 2019. Unless there’s substantial improvement in its fortunes for the rest of the year, River is now unlikely to hit this target.
Still, what management can control is the firm’s dividend payout. And City analysts are expecting a big jump in the payout for fiscal 2019 to 18.1p, giving a dividend yield of 6.2% on current prices. So, even though earnings growth might be about to come off the boil, investors will be paid to wait for a recovery.
Overall, I would rate River a ‘buy’ for its dividend and recovery potential. When combined with Witan in a retirement portfolio, I think the combination of income and growth could turbocharge your investment returns.
