The £5.2 billion Dundee-headquartered investment trust company Alliance Witan, has reported its 2024 results showing strong net asset value total return of 13.3%.
Nonetheless, the fund trailed its benchmark index, the MSCI All Country World Index (MSCI ACWI), which returned 19.6%.
The trust’s investment manager is Willis Towers Watson (WTW).
Dundee-headquartered Alliance Trust plc and London-based Witan Investment Trust plc merged last year to create Alliance Witan, a FTSE 100 company managing more than £5 billion of assets.
The company’s share price was £12.44 at December 31, 2024, representing a share price total return of 14.3%.
The investment trust’s average discount narrowed to 4.7% from 5.4% at the end of 2023, which compared favourably with the average discount for the Association of Investment Company’s Global Sector of 7.9%.
A fourth interim dividend of 6.73p per share was declared on January 28, 2025, bringing the total dividend for the year to 26.70p per share. This is a 6% increase on the previous year, the 58th consecutive annual increase.
The trust’s biggest holdings at the end of 2024 included Microsoft, Amazon, Visa, United Health Group, Alphabet, Diageo, Meta, Nvidia, Aon, Novo Nordisk, Netflix and Mastercard.
Alliance Witan chair Dean Buckley said: “The company delivered strong outright gains for shareholders in 2024, although in common with most active global equity strategies, we underperformed our benchmark index, MSCI ACWI, where performance was concentrated in a handful of the largest US companies.
“Even so, the company’s longer-term performance remains competitive, and demand for our shares was healthy last year, with the company’s discount narrowing, bucking the industry trend towards widening discounts. We also increased our dividend for the 58th consecutive year.
“Thanks to the support of both sets of shareholders, we achieved a historic combination with Witan, which places the company in a strong position to realise economies of scale and offer better liquidity for our shares.
“With solid performance and a refreshed brand, supported by a marketing campaign that will continue in 2025, the board is confident that the company is well placed to continue delivering attractive returns for shareholders”.
The fund’s managers, Craig Baker, Stuart Gray and Mark Davis of Willis Towers Watson, wrote: “The strong outperformance of our portfolio versus our benchmark in 2023 continued into the first quarter of 2024, when the biggest contribution came from not owning, at that time, poorly performing Tesla and Apple.
“But thereafter stock selection became more challenging, particularly within the ‘Magnificent Seven’. Although we benefitted from owning Amazon and Microsoft, we moved from an overweight to an underweight position in NVIDIA in the first quarter after its extraordinary outperformance, which then made it our biggest single detractor last year as that outperformance continued. Having helped us in the first quarter, the lack of exposure to Tesla and Apple, which both recovered strongly as the year progressed, counted against us from then on. Overall, our positions in the ‘Magnificent Seven’ accounted for a third of the portfolio’s underperformance versus the Index in 2024.
“The remainder of the portfolio’s underperformance came from a combination of being underweight in large-cap stocks in general and stock specific issues elsewhere, in some cases due to partial reversals of performance in 2023.
“For example, stock selection in financials detracted in large part due to our relative lack of exposure to strongly performing US banks such as JP Morgan and Goldman Sachs. In the consumer discretionary sector, the share price of UK-based drinks company Diageo, owned by Veritas Asset Management and Metropolis Capital, continued to suffer from a post-Covid cyclical downturn, falling 8.5%, although both managers believe the company will eventually recover lost ground when structural trends reassert themselves.
“Novo Nordisk, the Danish weight loss drugs company, was another notable detractor, as its shares fell 14% after disappointing test results. Our stock pickers see this as a temporary decline in a growing market in which Novo Nordisk has a leading position. Hence, it was one of our biggest purchases in 2024. Indeed, our stock pickers express a high degree of confidence in the latent value of many of their holdings. By far the most important long run ingredient underpinning share price performance is strong fundamentals, such as market-leading products or services, solid profit margins, plentiful cashflow and strong management.”