Alliance Trust PLC (LSE:ATST) PLC is to exclude stocks with significant exposure to thermal coal and tar sands from its portfolio.
“Although excluding stocks with significant exposure to thermal coal and tar sands will not result in significant divestments, it reinforces our ambition to have the portfolio managed to achieve net-zero greenhouse emissions by 2050 or earlier. The portfolio’s carbon footprint is already 32.8% lower than the benchmark [index] and this decision helps to keep us on the right track,” Gregor Stewart, the chair of Alliance Trust, said.
The investment trust also revealed it "comfortably outperformed" the index against which it benchmarks its performance in the first half of 2021.
Alliance’s net asset value (NAV) total return was 14.8% against 11.1% for the MSCI All Country World Index (MSCI ACWI).
At the end of June, NAV per share stood at 1,064.6p, up from 933.9p at the end of 2020. The NAV’s premium over the share price widened to 71.6p from 32.9p at the end of 2020.
The company announced a second quarterly dividend of 3.702p, taking the half-year pay-out to 7.404p versus 7.19p in the first half of last year.
The board is reviewing the level of the company’s dividend to assess if and how a more attractive and sustainable level of distributions may be provided to shareholders in the future, Alliance said.
“With the increasing spread of returns between companies, it is now becoming much more of a stock pickers’ market, which plays to the strengths of our diversified yet high conviction approach to investing,” said the trust’s chair, Gregor Stewart.
Stewart said the global market is now offering much more opportunity for active managers to add value and that market returns are broadening out from a period when it appeared investing in US technology stocks looked the only sensible game in town.
Extremely low-interest rates and massive fiscal stimulus by governments are helping to generate an economic recovery, but they could also lead to a sustained rise in inflation, Stewart noted.
“It’s equally possible that the recovery could falter and inflationary pressures abate if measures to control the virus lead to new restrictions on economic activity. Given the risks and wide range of potential outcomes, we believe the best results will be achieved by focusing on stock picking rather than trying to time markets and macro factors. If the recovery continues to broaden out, we believe it will provide attractive opportunities for our stock pickers to continue adding value, as they did in the first half of the year,” he concluded.
Shares in Alliance Trust were up 0.2% at 1,008p in early deals.