Alliance Trust beats benchmark with external managers

Dundee investment company Alliance Trust plc, which now uses external fund managers Willis Towers Watson (WTW), said on Friday its total shareholder return for 2019 was 24.3% and the Trust’s net asset value (NAV) total return was 23.1% — versus 21.7% for its benchmark, the MSCI All Country World Index (MSCI ACWI).

The Dundee closed end fund firm said that since the appointment of Willis Towers Watson in April 2017, its total shareholder return has been 28.9% and the Trust’s NAV total return has been 27.1% — outperforming the MSCI ACWI which returned 25.5% over the period.

The £2.5 billion Trust raised its total ordinary dividend for 2019 by 3% to 13.96p, marking the 53rd consecutive annual increase.

Alliance Trust plc shares rose about 22% in 2019.

Alliance Trust plc chairman Gregor Stewart said: “I am pleased to report that 2019 was a good year for the Trust; it outperformed its benchmark and many of our peers, despite political and macroeconomic headwinds.

“We have increased the dividend for the 53rd consecutive year, raising it by 3.0%.

“In 2019, our Total Shareholder Return was 24.3% and our NAV Total Return was 23.1%, versus 21.7% for our benchmark, the MSCI ACWI and a median return of 22.4% for our peers.

“Our investment strategy has also performed well since WTW was appointed in April 2017, delivering a Total Shareholder Return of 28.9% and a NAV Total Return of 27.1% versus 25.5% for the MSCI ACWI.

“During 2019, we completed the simplification of the Trust by selling our subsidiary, Alliance Trust Savings, and virtually all our remaining non-core assets.

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

“We expect the Trust’s new streamlined structure to lead to continued improvement in returns to shareholders, making us an attractive core holding for generations of investors for many years to come.”

In his outlook, Stewart added: “The outlook for the global economy and financial markets is, as always, uncertain.

“The coronavirus is an international problem that will impact directly or indirectly everyone.

“Our stock pickers have made some minor changes as part of their ongoing review of their stock selections.

“We are confident that the Trust remains well placed to be a core investment for our shareholders for generations to come, through a portfolio designed to outperform but with less volatility and risk than investments in equity funds with only one manager.”