TIDMATST
Alliance Trust PLC
23 July 2021
Alliance Trust (ATST)
23/07/2021
Results analysis from Kepler Trust Intelligence
Alliance Trust (ATST) released its interim results this morning
showing an NAV total return of 14.8%, outperforming its benchmark -
the MSCI All Country World Index (MSCI ACWI) - by a margin of 3.7%
over the six months to 30 June 2021.
The trust's strong performance was primarily driven by
stockpicking; its high conviction 'best picks' approach and strong
suite of underlying managers working well in an environment where
wide spreads were witnessed between the performance of individual
companies.
Despite the trust's strong performance, negative investor
sentiment toward the AIC Global sector as a whole meant total
shareholder returns were slightly less (11.1%) as the discount
widened during the period to stand at 6.3% at close of business
last night, wider than the peer group average.
The board has also announced plans to review the level of
funding behind the dividend, which could have interesting
implications in our view.
Kepler View
The last six months provide an interesting picture, in our view,
of what is possible for Alliance Trust (ATST).
Willis Towers Watson (WTW) took over as managers of the trust in
2017, and spent much of the first year of their tenure renovating
what was at the time a very large, very dull portfolio and turning
it into the animal we know today - a series of 'best picks'
portfolios managers by leading stockpicking managers identified by
WTW all around the world.
With that job done, the newly revamped trust was then faced with
a momentum driven market where investors were piling into trends
and themes with little regard for individual companies'
fundamentals. This began in 2019 and continued, via even greater
momentum shifts between growth and value during the most intense
phases of the COVID crisis, until the first quarter of this
year.
Against that backdrop - the overhaul of the portfolio and
disposal of old assets, and then a long momentum driven rally
totally unsuited to stockpicking strategies - WTW have delivered a
creditable outperformance of the benchmark MSCI All Country World
Index (MSCI ACWI) of 1.2% since their appointment(1) .
Over six months, however, in an environment where company
fundamentals have once again been absolutely at the forefront, the
managers selected by WTW have been able to show their true colours,
delivering a solid 14.8% NAV total return and putting a chunky 3.8%
margin of outperformance between the trust and the benchmark.
This outperformance coincides with a number of initiatives at
Alliance Trust, including a commitment to make the portfolio carbon
neutral - which should appeal to growing numbers of investors as
public consciousness continues to focus on this issue - and to
review the way in which the dividend is funded.
As we discuss in our analysis of these results, we believe there
could interesting implications for Alliance Trust, particularly if
performance continues to be strong.
Click here to read our results analysis in full.
(Notes:)
(1 - 1 April 2017 to June 30 2021)
Visit http://www.trustintelligence.co.uk/investor for more high
quality independent investment trust research.
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