Alliance Trust plc, the £3.4 billion Dundee-headquartered fund, has published its results for the year ended December 31, 2023, showing total shareholder return of 20.2%.

This result is 4.9% ahead of the investment trust’s benchmark, the MSCI All Country World Index (MSCI ACWI) which returned 15.3%.

Alliance Trust’s net asset value total return of 21.6% as at December 31 was 6.3% ahead of the benchmark.

The company said it has delivered a total shareholder return of 79.3% over the five-year period to December 31, equivalent to 12.4% per annum.

A fourth interim dividend 6.34p has been declared, bringing the total dividend for the year to 25.2p per share.

This is a 5% increase on the previous year, the 57th consecutive annual increase.

The Alliance Trust fund’s 20 biggest investments at December 31, 2023, were Alphabet, Microsoft, Amazon, Visa, Nvidia, Mastercard, Petrobras, UnitedHealth Group, TotalEnergies, Meta, MercadoLibre, Airbus, Diageo, ASML, Canadian Pacific, HDFC Bank, Adani Enterprises, VINCI, AIA and Fiserv.

Alliance Trust uses external fund managers Willis Towers Watson (WTW), which in turn appoints a number of other stock picking firms with different styles “who each ignore the benchmark and only buy a small number of stocks in which they have strong conviction.”

Those stock pickers include Black Creek Investment Management, GQG Partners, Jupiter Asset Management, Lyrical Asset Management, Sustainable Growth Advisers, Veritas Asset Management, Vulcan Value Partners, Sands Capital Management, Metropolis Capital Limited and Dalton Investments.

“Most of our stock pickers outperformed the MSCI ACWI, with the outperformers having a variety of investment styles and exposures,” said Alliance Trust.

“Vulcan Value Partners, which buys high quality stocks when their share prices drop below estimated long term value, was the biggest contributor to the portfolio’s outperformance.

“Vulcan’s concentrated selection of stocks rose collectively by almost 50%. Its most successful holdings included two of the ‘Magnificent Seven’, Microsoft and Amazon, but Vulcan’s top five contributors also included the industrial conglomerate General Electric and the private equity group KKR, whose share prices rose by 85% and 70% respectively.

“Veritas and Sustainable Growth Advisors (SGA), both of which focus on high quality growth stocks, were close behind Vulcan, along with growth-style specialist Sands Capital, and Metropolis Capital, which has a value based investment philosophy.

“Veritas and SGA both benefitted from owning Amazon and Alphabet, but, as with Vulcan, not all their top contributors were US tech-related businesses.

“Veritas’ largest contributors to portfolio outperformance included Safran, the French aerospace and defence company, and Aena, the Spanish industrial group; SGA’s contribution was topped by MercardoLibre, Latin America’s answer to eBay.

“Sands was actually the strongest performer of all the managers in absolute terms but its low weight in the portfolio, means that it did not contribute as much to the portfolio’s outperformance as the others. Sands’ biggest individual contributor was the US software company ServiceNow and Metropolis’ was Alphabet.

“At the other end of the spectrum, the holdings in aggregate of Black Creek Investment Management and Jupiter failed to keep up with the market, but both picked some notable individual winners, as did GQG Partners whose overall return was market-like in 2023.

“For example, Black Creek’s investment in Ebara, the Japanese industrial equipment manufacturer, returned 60% and was among the biggest individual contributors to portfolio performance.

“Jupiter’s holdings in Kyndryl, the US technology infrastructure business spun out of IBM in 2021, posted a gain of 76% and GQG’s investment in Petrobras, the Brazilian state-owned oil and natural gas major, delivered a return of almost 80%.”

Alliance Trust PLC chair Dean Buckley said: “In a volatile market environment, Alliance Trust reported strong returns, outperforming the MSCI ACWI and most of its peers in the Association of Investment Companies (AIC) Global Sector.

“These results extend the company’s long-term track record of attractive outright gains and relative performance.

“In a highly concentrated market, it was reassuring to note that the driver of the company’s outperformance in 2023, was the broadly-based, skilled stock picking approach, rather than the result of any significant style, country, or sector biases.

“I am pleased to say that this year also marks the 57th consecutive annual dividend increase a track record which is one of the longest in the investment trust industry, and one which the Board is confident can be extended well into the future.”