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Monthly Factsheet

31 December 2015


Price: 517.0p NAV (inc Income): 562.4p Discount: 8.1%

31 December 2015

Market & Portfolio Commentary

The MSCI All Country World Index rose slightly in December, 0.3% with a modest rise of 3.8% over the course of 2015. The year closed as it had opened with considerable intraday volatility as a result of economic uncertainties and this looks set to continue into 2016. Commodity prices especially oil, continue to fall and with the prospect of further economic slowing in China and Iranian supply coming on-stream, downward pressure will persist. The US dollar continued to rally against Sterling and the Euro, which helped protect UK investor returns. However, European equity markets were weak across the board as economic data disappointed.

At a Global sector level the best performers were Health Care, up 3.7%, Utilities, up 3.6% and Consumer Staples, up 2.8%. The worst performers were Energy, down 7.1%, Materials, down 1.6% and Industrials, down 0.5%.

Portfolio and Performance Update

There were no significant changes at a stock level over the month and we closed the year with 60 discrete holdings in the equity portfolio - the top 20 making up 46.8%. Financials, Information Technology and Health Care continue to represent a large portion of the assets, making up 58.1% of the overall equity exposure. The overall regional exposure remains unchanged.

The discount narrowed over the month from 10.1% to close the year at 8.1%, its lowest month end level for over 10 years. The year-end gross gearing fell slightly from 14.1% to 13.0%.

Outlook

This has been a challenging year for stockpickers with significant volatility across many sectors. Our investment process and stock selection has guided us through some of this and had a positive contribution to returns. This once again highlights the need to focus on quality companies with strong fundamentals and sustainable business models. Our philosophy and process identifies these high quality companies and then integrates this assessment into analysis of their value and hence their appropriateness for inclusion in the equity portfolio. Trying to second guess economic changes and political uncertainty will be as difficult in 2016 as it was in 2015 so we will continue to focus on the value drivers of stock specific returns and actively manage the portfolio for the long term.

Buy Backs

During the month we bought back 7.8m shares (1.5%) of the issued share capital at the cost of £39.2m.

Asset Allocation


Assets
% of Net Assets
Net Equity Exposure
102.0
Fixed Income
2.5
Private Equity
4.3
Operating Subsidiaries
2.5
Cash & Other Net Assets
1.7
Gross Assets
113.0
Gearing
(13.1)
Net Assets Inc Income
100.0
Source: Alliance Trust

Key Information


Market Capital:
£2,721.2m
Total Assets:
£3,345.1m
Net Assets:
£2,955.1m
Total Borrowings:
£390.0m
Ongoing Charges Ratio (year to December 2014):
0.60%
Net Yield:
1.9%
Year End:
31 December
Date of Incorporation:
21 April 1888
Dividend Paid:
April, June, September, December
Issued Share Capital:
526,340,897
Source: Alliance Trust

Performance

Cumulative Performance

To 31 December 2015
One Month
Six Months
One Year
Three Years
Five Years
Total Shareholder Return
1.6
7.8
10.7
48.3
57.1
NAV Total Return
-0.3
4.0
5.4
34.5
39.6
Equity portfolio gross return*
0.3
4.7
6.1
38.1
N/A
MSCI ACWI Total Return (£)
0.3
1.7
3.8
39.9
46.6

Cumulative Performance
Source: FactSet and Morningstar

*The equity portfolio was restructured in December 2011 and equity portfolio returns prior to December 2012 are not comparable.

Discrete Performance – Total Return (%)

12 Months to December
2015
2014
2013
2012
2011
Total Shareholder Return
10.7
9.2
22.7
12.4
-5.7
NAV Total Return
5.4
7.9
18.2
12.1
-7.4
Equity portfolio gross return*
6.1
7.2
21.4
N/A
N/A
MSCI ACWI Total Return (£)
3.8
11.2
21.1
11.7
-6.2
Source: FactSet and Morningstar
*The equity portfolio was restructured in December 2011 and equity portfolio returns prior to December 2012 are not comparable.

Alliance Trust Discount

Alliance Trust Discount
Source: Factset and Morningstar

Regional Allocation & Revenue (%)†

Regional Allocation & Revenue
Source: Alliance Trust and FactSet

  • Geographic weight is based on the region in which the company is listed.

  • Revenue split analyses the segmental reporting of revenue by the companies in which Alliance Trust invests.

  • Analysis excludes segmental non-specific income such as “Rest of the World” (15.1%) as the definition varies from company to company.

Regional Allocation Breakdown (%)†*

Regional Allocation Breakdown
Source: Alliance Trust and FactSet

Sector Allocation (%)†

Sector Allocation
Source: Alliance Trust
† Weightings are calculated on a look-through basis whereby the Trust's exposure is combined with that of its holdings in Alliance Trust Investments' funds in order to calculate total exposure.
* All countries with exposure of greater than 0.05% shown.

12 month equity portfolio performance attribution


 
Equity portfolio
MSCI ACWI (£)
     
Sector
Average Weight
Total Return
Average Weight
Index Total Return
Sector Allocation Effect
Stock Selection Effect
Total Effect
Consumer Discretionary
8.24
20.81
12.55
10.63
-0.30
0.68
0.38
Consumer Staples
8.27
5.47
9.92
11.82
-0.12
-0.44
-0.56
Energy
5.20
-14.83
7.21
-17.09
0.47
0.10
0.57
Financials
25.40
3.12
21.55
0.33
-0.13
0.71
0.59
Health Care
16.94
15.06
12.22
12.99
0.44
0.27
0.71
Industrials
7.94
7.12
10.52
3.17
0.03
0.34
0.37
Information Technology
18.25
9.72
13.95
9.68
0.24
0.09
0.34
Materials
4.41
-12.13
4.95
-11.50
0.03
-0.06
-0.03
Telecom Services
1.82
3.44
3.72
4.55
0.01
-0.02
-0.01
Utilities
3.52
-2.59
3.17
-2.10
-0.08
-0.06
-0.14
Total
100.00
6.13
100.0
3.84
0.60
1.60
2.20
Source: Factset and Morningstar
Performance attribution is calculated over 12 months to 31 December 2015.

Top 20 Equity Investments†


Rank
Name
£m
% Quoted equities
1 Visa
117.3
3.9
2 Pfizer
100.1
3.3
3 Accenture
89.1
3.0
4 Prudential
87.6
2.9
5 Walt Disney
82.9
2.7
6 Amgen
77.6
2.6
7 Wells Fargo
75.8
2.5
8 CVS Caremark
74.2
2.5
9 CSL
69.6
2.3
10 National Grid
65.5
2.2
11 Legal & General
64.6
2.1
12 NASDAQ
59.5
2.0
13 American Tower
59.0
2.0
14 Intesa Sanpaolo
57.9
1.9
15 Blackstone
56.1
1.9
16 Daikin Industries
55.5
1.8
17 Reckitt Benckiser
54.7
1.8
18 Continental
53.7
1.8
19 Equinix
53.2
1.8
20 Danaher
53.1
1.8
Source: Alliance Trust

The top 10 holdings currently make up 27.9% of net assets.
The top 20 holdings currently make up 46.8% of net assets.

Full Portfolio Breakdown

A full breakdown of the Trust's portfolio can be viewed here

Key Trades

Largest new holdings
None
No Longer Held
Sanofi
Source: Alliance Trust

Contact


George Renouf

George Renouf

Head of Client Management and Investor Relations
Alliance Trust PLC,
8 West Marketgait
Dundee DD1 1QN

Tel +44 (0)1382 321022
Fax +44 (0)1382 321185

Contact us here

Objective


Alliance Trust is a self-managed investment company with investment trust status. Our objective is to be a core investment for investors seeking increasing value over the long term. We have no fixed asset allocation benchmark and we invest in a wide range of asset classes throughout the world to achieve our objective.

Our focus is to generate a real return for shareholders over the medium to long term by a combination of capital growth and a rising dividend.

Risk Warning


Your capital is at risk. You may not get back the full amount you invested. Full risk warnings can be found in the Important Information Section below.

There may be words or phrases you are not familiar with. Speak to your stock broker or financial adviser if you need further explanation.

Important Information


Alliance Trust PLC is a self-managed investment trust company, operating from 8 West Marketgait in Dundee.

The views, information and data in this publication should not be deemed as a financial promotion or recommendation. Alliance Trust PLC is not authorised to give financial advice.

Please remember past performance is not a guide to future performance. You may not get back the amount you invest. The value of your investment, and any income from it, may fall as well as increase.

For security and compliance monitoring purposes, telephone calls may be recorded.

Exchange rate changes may cause the value of overseas investments to go down as well as up.

Investment trusts may borrow to finance further investment (gearing). The use of gearing is likely to lead to volatility in the Net Asset Value (NAV) meaning that a relatively small movement, down or up, in the value of a trust’s assets will result in a magnified movement, in the same direction, of that NAV. This may mean that you could get back nothing at all.
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