Alliance Trust pleased with progress amid turbulent markets

Alliance Trust posted its results for the six months ended 30 June on Thursday, reporting total shareholder return of 1.1%, net asset value total return of 2.9%, and equity portfolio total return of 2.9%, compared with MSCI ACWI total return of 2.3%.

The FTSE 250 organisation’s share price at period end was 748p, up from 700p a year earlier, while its net asset value per share was 793.2p, rising from 742.2p.

Its board said the total dividend as at 30 June was 6.778p, rising from 6.58p.

On the operational front, the board said that since Willis Towers Watson's appointment in April last year, the equity portfolio had delivered a total return of 12.9%, and the trust a net asset value total return of 12.3%, compared to the MSCI ACWI's 10.1% over the same period.

Its equity portfolio was reportedly on track to deliver its target of 2% outperformance after costs over a rolling three year period versus the benchmark.

It declared an interim dividend of 3.389p - an increase of 3% year-on-year and adding to more than 50 years of successive dividend growth.

The discount to net asset value averaged 5.8% over the period, widening from 5.1% a year ago.

“I am pleased to report another period of steady performance against an increasingly volatile market backdrop, driven by returns from the global equity portfolio constructed by WTW, which now represents 95% of the trust assets,” said chairman Lord Smith of Kelvin.

“We are on track to deliver the target we set when we started our new investment strategy on 1 April 2017, of outperformance of 2% more than the benchmark after costs over a rolling three year period.

“I am also pleased that we have declared a 3% year-on-year increase in our interim dividend, as we celebrate over half a century of growing our dividend.”

He said that, although the short-term market future looked set to remain uncertain, Alliance Trust remained focused on consistent outperformance over the long-term, at a competitive cost.

“We are encouraged by the steady progress made by WTW's ‘all-weather’ approach to active stock picking.

“Our diversified, high conviction portfolio is designed to deliver consistent outperformance, irrespective of the dominant drivers of returns in any given period, with low volatility.

“We believe that the trust now has a highly differentiated offer for investors that will continue to deliver attractive and sustainable returns for shareholders.”