Alliance Trust hails new approach as returns outperform market

Alliance Trust said its new investment approach was paying off as it posted annual returns that outperformed the market.

Total shareholder return for the year to the end of December was 19.2%, outstripping the 13.8% total return achieved by the benchmark MSCI All Country World Index. Net asset value total return was 18.5% and the share price rose 17% during the year. Alliance’s equity portfolio outperformed the index by 4.2%.

The 130-year-old investment trust proposed a final dividend of 3.29p to take the annual payout to 13.16p – a 3% increase on 2016.

Alliance Trust overhauled its investment strategy in 2017, selling its fund management arm, scrapping a socially responsible ethos and placing funds with several investment managers to improve sluggish performance and reduce costs. It did so under pressure from Elliott Advisers, an activist investor, which pushed for a boardroom overhaul.

Chairman Robert Smith said: "This has been a transformational year for the trust. We implemented our new investment approach - a global alliance of high-conviction equity managers - on 1 April 2017 and, in its early days, the approach is delivering encouraging results and outperformance. We are continuing the trust's progressive dividend policy and believe the foundations are now firmly in place for Alliance Trust to deliver strong and sustainable performance for our shareholders for generations to come."