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Alliance Trust is a "new animal" after completion of shake-up

Published: 08:02 06 Mar 2020 GMT

Alliance Trust -

Alliance Trust PLC (LON:ATST) said the diversification of its portfolio was key to the 21% growth in net asset value (NAV) last year and, say analysts, “offers promise” at a time when the investment outlook is uncertain.

The NAV per share ended 2019 at 875.9p, up from 723.6p over the 12 months.

With the total dividend lifted 3% to 13.96p the investment trust's NAV total return was 23.1% after a 5.4% fall the year before, versus a 21.7% gain in 2019 for its benchmark, the MSCI All Country World Index.

With the shares up 22% over the year and adding in the dividend, the trust's total shareholder return for 2019 was 24.3% after falling 6.1% the prior year.

The year ended the with the shares at 840p, meaning they were trading at a discount of 4.1%, which has since expanded to 4.6% as the NAV at the close on Wednesday was 847.4p.

Directors renewed the trust’s commitment to a progressive dividend policy.

Last year saw the final parts put in place for the overhaul of the trust and its portfolio after it was relaunched under pressure from investors in April 2017 with Willis Towers Watson (WTW) as its investment manager, with all legacy holdings now sold as well as subsidiary, Alliance Trust Savings.

“As a result, we are now fully focused on global equities, something the board has been working towards for the last four years,” said chairman Gregor Stewart.

Top 20 holdings are led by Alphabet, Microsoft, Amazon.com and Alibaba, with other names including BAE System.

ATST is “a completely new animal,” agreed Kepler Trust Intelligence in a new analysis, saying the characteristics of its performance so far “suggest the new strategy is finding its feet well”.

The analysts added: “Of particular note, in our view, is the performance of the trust during 2019 when - in the middle of the year - the dominant 'growth' stocks which have driven performance from many years now lost ground to 'value' stocks which have over the same period been in the doldrums.

“The fact that this shift did nothing to stop ATST performing... suggests the diversification offered by its approach - and the lack of any one dominant style among the underlying managers - really exists and offers promise to investors at a time when the outlook is very uncertain.”

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