Alliance Trust (ATST)
28/02/2022
Results analysis from Kepler Trust Intelligence
ATST generated a 12 month NAV total return of 18.6%, and a share price total return of 16.5%, compared to the 19.6% return of its benchmark, the MSCI ACWI (as of 31 December 2021).
Its relative underperformance was the unfortunate result of stylistic headwinds its highly diversified approach faces, as during the final quarter of 2021 global equity markets were led by a narrow group of mega cap tech companies.
A major change for the trust over its financial year was in substantial increase in the level of dividends it paid, reflected in the third and fourth interim dividend, which increased 32.5% year-on-year.
Kepler View
ATST delegated managers, Willis Towers Watson (WTW), have created what we believe is an interesting 'one-stop-shop' solution to global equity investing with outperformance potential. ATST has a diverse, low-factor-risk portfolio with all the benefits of active management, as it still has a 75% active share despite its c. 200 holdings.
ATST's underperformance versus its benchmark has been the direct result of the leadership of a handful of mega cap stocks, specially the dominance of US technology giants, with the eight largest constituents of the MSCI ACWI being US tech giants and accounting for c. 15% of the index. It was the direct result of a strong Q4 rally in these small cohort of stocks that ATST modestly underperformed, after outperforming in the three quarters prior to this.
This is the outcome of what is probably one of the worst macro environments for ATST's approach. ATST's portfolio is made up of what their delegated stock pickers believe are the most attractive long-term investment opportunities across a diverse range of regions, styles, and sectors. This means that it the underlying managers are unlikely to collectively overweight a handful of mega cap technology stocks.
Yet thanks to operational improvements and potential macro tailwinds, ATST currently wide discount may offer an attractive entry point.
CLICK HERE TO READ THE FULL REPORT
Visit http://www.trustintelligence.co.uk/investor for more high quality independent investment trust research.
Important information
This report has been issued by Kepler Partners LLP. The analyst who has prepared this report is aware that Kepler Partners LLP has a relationship with the company covered in this report and/or a conflict of interest which may impair the objectivity of the research.
Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. It is strongly recommended that if you are a private investor independent financial advice should be taken before making any investment or financial decision.
Kepler Partners is not authorised to make recommendations to retail clients. This report has been issued by Kepler Partners LLP, is based on factual information only, is solely for information purposes only and any views contained in it must not be construed as investment or tax advice or a recommendation to buy, sell or take any action in relation to any investment.
The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country. In particular, this website is exclusively for non-US Persons. Persons who access this information are required to inform themselves and to comply with any such restrictions.
The information contained in this website is not intended to constitute, and should not be construed as, investment advice. No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the information and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information, for any errors, omissions or misstatements, negligent or otherwise. Any views and opinions, whilst given in good faith, are subject to change without notice.
This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.
Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm's internal rules. A copy of the firm's Conflict of Interest policy is available on request.
PLEASE SEE ALSO OUR TERMS AND CONDITIONS
Kepler Partners LLP is authorised and regulated by the Financial Conduct Authority (FRN 480590), registered in England and Wales at 70 Conduit Street, London W1S 2GF with registered number OC334771.
Reach is a non-regulatory news service. By using this service an issuer is confirming that the information contained within this announcement is of a non-regulatory nature. Reach announcements are identified with an orange label and the word “Reach” in the source column of the News Explorer pages of London Stock Exchange’s website so that they are distinguished from the RNS UK regulatory service. Other vendors subscribing for Reach press releases may use a different method to distinguish Reach announcements from UK regulatory news.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
