Fund Profile

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Alliance Trust. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
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Overview

Alliance Trust (ATST) follows a well-diversified approach to global equity investing, while still retaining the benefits of active management. ATST’s management has been delegated to Willis Towers Watson (WTW), the global investment consultancy. WTW brings with it a huge depth of resources, whereby 4,000 researched equity long only asset managers are condensed into a list of 20 potential managers, those which WTW deems to be both best in class and skilled at managing concentrated portfolios. For ATST’s portfolio, WTW currently utilises 10 of these managers blended with complementary styles in such a way as to diversify away the vast majority of factor, sector and regional risks relative to benchmark while still retaining the benefits of active management, as demonstrated by the trust’s high active share.

ATST’s portfolio is a unique combination of managers, as each manager invests in a customised portfolio of highest-conviction stocks, as opposed to replicating an existing strategy. ATST offers retail investors one of the few ways they can access some of the underlying managers, given their services are often not available to UK investors. Likewise, WTW’s advisory investment services are also typically reserved for large professional clients.

ATST’s long-term performance has kept pace with global markets, while its performance over the last 12 months has been strong, with the trust outperforming both its benchmark and peers. We cover this in more detail in our Performance section. ATST also has one of the longest track records of dividend increases of any investment trust. Shareholders have recently voted to approve a change in its reserve structure, which may lead to a potential dividend cover of 19x, providing it with enormous support for future dividend payments.

Analyst's View

ATST offers clients a singular solution to global equity investing, providing them with a diversified exposure to global equity markets while preserving the benefits of active management. We believe ATST could be used to replace a passive exposure to global equities (given the trust’s near-identical factor and regional exposures), or for an investor who wishes to add potential alpha to their pre-existing allocation.

We believe that retail investors may find additional attractions in ATST. These include the unique exposures that ATST provides, given its use of managers which are not typically available. The trust also gives investors access to the investment capabilities of WTW for the complex task of manager assessment and monitoring along with risk management and portfolio construction, making ATST a ‘fire and forget’ style of investment.

While recent markets have not suited active stock-picking, given the concentration of returns around mega-cap and growth stocks and strong market momentum since 2019, we believe ATST’s competitive returns are encouraging given WTW actively seeks to diversify away from such exposures. Thankfully, as said momentum dissipates, active management can return to prominence as stock-specific factors begin to dominate, something we have already begun to see in ATST’s recent 12-month outperformance.

While ATST’s discount has been largely consistent since WTW took over, the advent of a stock-picking-friendly market could be the catalyst for further outperformance, which may in turn lead to a narrowing of the discount.

Bull
Bear
Only way to access certain underlying managers
Can underperform in trend-driven markets
Post-COVID-19 markets may be more suitable for active stock-picking
Gearing can amplify losses on the downside
Potentially huge revenue reserve to support the dividend
Relatively low yield may be unattractive to income investors
Continue to Portfolio

Fund History

13 Jul 2024 Ch-ch-ch-changes
Politics isn’t the only place where there are big changes at the top, but for shareholders change is often a good thing…
10 Jul 2024 Things can only get better
Discounts are yawning but markets are thawing and boards are on the offensive; Labour might not be the only thing making a comeback this year...
06 Jul 2024 America for growth, Japan for value
Different investment styles are needed for different regions…
05 Jul 2024 Flash update: Alliance Trust
Thoughts on Witan’s proposed merger with Alliance Trust…
04 Jul 2024 Flash update: Witan
Thoughts on Witan’s proposed merger with Alliance Trust…
03 Jul 2024 Monthly roundup: merger news and highlights from our June small cap event
Jo and Ryan discuss the latest news, reviews and interviews in the investment trust world...
31 May 2024 Stock spotlight: Rinnai
Rinnai peaked Dalton Investments' Jamie’s interest when he needed an energy efficient, on-demand hot water solution in his own busy household. Subsequent research has shown that the company has huge market potential...
24 May 2024 Stock spotlight: Nvidia
Brian Kersmanc, GQG Partners, describes how Nvidia’s early call on AI and full end-to-end solution for clients has kept it at the leading edge of computing...
17 May 2024 Stock spotlight: United Rentals
United Rentals is the largest equipment rental and management company in the world, with operations in 1,500 locations across North America, Europe, Australia, and New Zealand, serving customers across construction and industrial sectors..
10 May 2024 Dalton Investments: Japan Update
Dalton's Jamie Rosenwald provides an update on Japan, focusing on the status of recent corporate reforms, revisions to the NISA and the potential normalisation of monetary policy...
10 May 2024 O' fickle fortune!
The Magnificent Seven have replaced the FAANGS as the darlings of the stock market, but we think it pays to bear in mind how quickly things can change…
17 Apr 2024 Pretty, pretty, pretty good
Do investment trusts really protect capital and income against inflation? Let's take a look…
07 Mar 2024 Video update: Alliance Trust annual results
Willis Towers Watson global CIO Craig Baker discusses the trust's strong results for its latest financial year...
23 Feb 2024 Stock spotlight: Dexcom
Sands Capital’s Sunil Thakor looks at medical device company Dexcom – leader in the field of continuous glucose monitoring – and examines what makes it a high-quality growth business...
16 Feb 2024 Stock spotlight: Airbus
In our new series of stock spotlight videos, Veritas’ Andy Headly focuses on Airbus and talks about the qualities that make it so attractive compared to its closest competitor...
14 Feb 2024 Investing in multi-manager funds with Alliance Trust – Podcast: Trust Issues #24
We talk about multi-manager funds and what Alliance Trust offers investors looking for a core global equity holding…
23 Feb 2024 Alliance Trust
Stuart Gray
Rewatch this webinar which is part of our single manager February event
Watch Recording
09 Feb 2024 Protecting against the unknown
Accepting that prediction making is flawed makes life easier for investors…
07 Feb 2024 Stock spotlight: Ashtead
Jonathan Mills from Metropolis Capital talks about his conviction in the equipment rental firm, Ashtead, which supplies a wide range of plant and commercial equipment to companies in the UK, US and Canada...
26 Oct 2023 Fund Analysis
ATST’s core equity strategy continues to deliver in an uncertain environment…
04 Aug 2023 A rising sun in Japan
Unprecedented action from Japan’s central bank reflects warming sentiment towards the country…
28 Jul 2023 Results analysis: Alliance Trust
ATST delivered strong NAV returns in the first half of the year…
12 Jul 2023 Many hands make light work
We break down how multi-managers have performed over the past five years and their positioning for the inevitable uncertainty that lies ahead…
02 Jun 2023 An automated future
Labour shortages seem more pressing than building LLMs…
30 May 2023 Fund Analysis
ATST’s specialist managers have added value in volatile market conditions…
16 Mar 2023 Diversity matters
We examine the effect of blending multiple funds within your regional allocation and find that – while the culture wars may rumble on elsewhere – the benefits of diversity for investors are unarguable…
09 Mar 2023 Results analysis: Alliance Trust
ATST’s 2022 full-year results illustrate that its unique approach to portfolio allocation is paying off…
02 Dec 2022 A global equity bounce back?
There are some positive early signs for ATST’s managers…
03 Oct 2022 Slides and Audio: Alliance Trust
Download the presentation and listen to the audio from our 'What next for global equities?' webinar from 29 September...
07 Sep 2022 Fund Analysis
ATST’s diverse core equity offering has outperformed its peers in today’s bear market...
01 Sep 2022 Fewer stocks, more diversification
Alliance Trust has protected shareholders from losses in a tough year for investors…
17 Aug 2022 The world for sale
While investment trusts are lagging their open-ended cousins in the global sector, their discounts may provide an attractive entry point...
28 Jul 2022 Results analysis: Alliance Trust
ATST’s half year results have demonstrated the benefits of its highly diversified approach to active management…
15 Jun 2022 Staying active
We highlight several alternatives to passive investments for investors looking for core exposure in uncertain markets...
27 May 2022 Hand it over to the professionals
Multi-manager trusts let ordinary people leave the hard work of asset allocation, portfolio construction and ongoing active management to expert investors…
18 May 2022 Riding out the storm
We look at trusts with tightly governed discounts which may appeal to investors in volatile markets…
30 Mar 2022 You say tomato…
Do it yourself or put it into a global fund and leave it to the experts - our analyst debate the merits of each approach...
17 Mar 2022 It's the end of the world as we know it
We examine five potential themes for investors seeking long-term returns in a troubled and uncertain world...
02 Mar 2022 Spread 'em!
We explore how much dispersion in returns of stocks drive the differing fortunes of trusts…
28 Feb 2022 Results analysis: Alliance Trust
ATST’s latest results indicate that despite stylistic headwinds it has still generated a competitive NAV return, and now trades on an attractive discount…
19 Jan 2022 A unique structure for dividend seekers
Alliance Trust is the only way ordinary UK private investors can get exposure to a select group of leading asset managers…
21 Dec 2021 Fund Analysis
ATST offers investors a ‘core’ equity exposure, utilising seldom-found managers and having recently upgraded its dividend…
08 Dec 2021 Five expert tips for choosing a fund manager
We asked the expert fund selectors at Willis Towers Watson what they look for when they’re trying to identify a winning fund…
01 Dec 2021 Slides and Audio: Alliance Trust
Our research team at Kepler Trust Intelligence hosted a 45 minute webinar update with Willis Towers Watson, the managers of Alliance Trust...
03 Nov 2021 Don't fear the reaper
With market direction hard to call, we consider the case for taking a long-term view in the investment trust sector…
20 Oct 2021 Board games
Investment trust boards talk a good game about championing shareholders interests - but do they really deliver?
24 Aug 2021 Looks can be deceiving
Top-down portfolio characteristics can obscure the investment characteristics of a trust, particularly when it comes to multi-manager portfolios. Here, we examine how Alliance Trust maintains a high active share while still offering a diversified underlying portfolio…
19 Aug 2021 Pandemic immunity
We ask which global equity trusts have outperformed through the different stages of the pandemic…
23 Jul 2021 Results analysis: Alliance Trust
Alliance Trust released a strong set of results this morning showing strong NAV growth driven by stockpicking, but the trust’s discount remains wider than the peer group average…
10 Jun 2021 Time for the stock pickers
As a decade of growth-led momentum gives way to a choppy value resurgence, the outlook for markets is uncertain. Stock pickers like the team behind Alliance Trust are poised for their moment in the sun…
26 May 2021 Fund Analysis
ATST offers investors access to Willis Towers Watson’s exclusive multi-manager portfolio, which has generated strong returns over the last 12 months…
24 Mar 2021 Keeping a level head: the balanced approach to investing
The recent rotation has put a spotlighted how quickly an investment style can fall in or out of favour. For many investors, timing the market is a challenge, which makes a truly active yet balanced approach appealing…
04 Mar 2021 Results analysis: Alliance Trust
ATST’s unique blend of stockpicking managers has delivered solid absolute returns against a volatile backdrop and extended its impressive dividend track record once again…
16 Dec 2020 My haven’t you grown!
How sustainability has gone from zero to hero in 2020…
27 Nov 2020 Fund Analysis
ATST offers a blended portfolio of nine highly concentrated funds...
29 Oct 2020 Alliance Trust: A standout trust for the uncertain times ahead
With ISA season quickly approaching, we look at a trust which can offer attractive returns in both bull and bear markets, and has a track record to prove it…
21 Sep 2020 Alliance Trust: more than meets the eye
Due to the high alpha approach, capital appreciation often gains the headlines, however ATST is also one of the most dependable income sources in the investment trust universe…
09 Sep 2020 No need for compromise
The volatility of global markets has illustrated how ‘all-in-one’ investment vehicles can be beneficial for investors. We look at ATST, which can offer diversification without compromising growth…
23 Jul 2020 Results analysis: Alliance Trust
The global growth giant holds income steady as COVID continues to batter dividends for investors…
05 Jun 2020 Deep impact
Audio and presentations from our conference this week, where fifteen of the world's best fund managers described a profoundly altered investment landscape...
13 May 2020 Braving the new world
Join 15 of the UK's best known fund managers at the Kepler Trust Intelligence Virtual Summit to find out how they see the world after the pandemic...
03 Apr 2020 Beware the risk: the other side of investing
Return is the focus of most investment discussion - but risk is a vital part of the investing equation too. We discuss Alliance Trust's approach to risk management...
11 Mar 2020 Lessons from the coronavirus: keep things simple when it comes to investment
With two major shocks hitting global markets so far in 2020, the case for a straightforward approach to investment has been thrown into relief...
06 Mar 2020 Results analysis: Alliance Trust
The once sleepy global equities giant released a strong set of annual results this morning, beating its benchmark, reducing its costs, and increasing its dividend for the 53rd consecutive year…
25 Feb 2020 First among equals
Multi-manager is a popular strategy, but some multi-manager funds are cut from a finer cloth…
16 Jan 2020 Fund Analysis
ATST offers exposure to some of the world’s best leading managers via a low cost manager of managers approach…
06 Nov 2019 Alliance Trust portfolio update
Willis Towers Watson CIO Craig Baker discusses the century old trust's 'go anywhere' investment strategy...
10 Apr 2019 Because they're worth it
With the rise of the passives putting more pressure on fees than ever before, we argue that performance fees could be the key to encouraging truly active investment trust managers...
25 Mar 2019 Race ready
Clare Dobie explains how the board upon which she sits set about transforming the once sluggish Alliance Trust into a sleek hulled racing clipper...
27 Feb 2019 A marathon not a sprint
Our research shows that investment trusts' structural advantages give them a significant edge for investors seeking long-term capital growth...
27 Feb 2019 Fund Analysis
After changing its spots in 2017, Alliance Trust continues to deliver a growing dividend and attractive returns...
15 Aug 2018 The income edge
Last year saw investment trusts soar in popularity among both retail investors and wealth managers. We examine why this has happened, as well as the structural advantages of investment trusts for income-hungry investors...
09 Jul 2018 Go big or go home
Our research suggests that fund managers who are willing to back their convictions with punchy bets tend to outperform over the long term...
04 Jul 2018 Fund Analysis
Alliance Trust has changed its spots dramatically, adopting an interesting portfolio management approach that uses 8 sub-managers, each tasked with managing a highly concentrated portfolio...
View all

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