RCS - Alliance Trust PLC - Results analysis from Kepler Trust Intelligence

Alliance TrustAnnouncement

28/02/2022 13:30

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RNS Number : 0535D  Alliance Trust PLC  28 February 2022

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
(https://www.trustintelligence.co.uk/investor/articles/news-investor-results-analysis-alliance-trust-retail-feb-2022)
 

 

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(http://www.trustintelligence.co.uk/investor) for more high quality
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