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Monthly Factsheet

31 January 2015


Price: 488.8p NAV (inc Income): 560.7p Discount: 12.8%

Commentary for January 2015

Market Commentary

2015 has started positively for global equities. The MSCI All Country World Index rose 2.2% in Sterling terms which is encouraging, as Sterling was stronger against both the US dollar and the Euro. The most significant development was that the ECB announced that it would start quantitative easing (QE) for the first time. They have committed to buy €60bn per month from this March to September 2016, a total of €1trn. This followed poor economic figures across Europe, including outright deflation in a number of countries such as Germany. As a result most Government bond yields have fallen. Equity markets responded well to the QE announcement with the MSCI European Index up 3.7% by month end.

At a Global sector level we once again saw a wide dispersion of returns. Energy continued to be under pressure and was down 1.4% with Financials down 0.9%. The best performers were Health Care (+6.3%), Telecoms (+5.4%) and Consumer Staples (+5.3%).

Portfolio and performance update

The only portfolio activity has been a switch from Diageo to Ambev, the Brazilian based brewer. We think that Diageo has reached a full valuation and now faces considerable headwinds and that Ambev, which has greater global exposure to beer, is a better long-term growth prospect.

The discount widened slightly over the month from 12.5% to 12.8%. Gearing is down from 12.6% to 12.3%.

Outlook

The divergence of sector returns over the first month of 2015 has emphasised once again how important it is to remain focused on the factors that drive stock specific returns over the medium to long-term. Recent moves have not made us change our assessment that equities remain relatively good value, particularly when compared to other asset classes however, markets are still not cheap. Our bottom-up analysis allows us to value companies on their own merits, and we continue to see opportunities in well managed companies with strong fundamentals and sustainable business models. We will continue to actively manage the portfolio by focusing on the companies we want to invest in for the long-term.

Asset Allocation


Assets
% of Net Assets
Net Equity Exposure
96.6
Fixed Income
5.8
Private Equity
4.5
Other Net Assets
1.2
Cash
4.2
Gross Assets
112.3
Gearing
(12.3)
Net Assets Inc Income
100.0
Source: Alliance Trust

Key Information


Market Capital:
£2,704.8m
Total Assets:
£3,476.4m
Net Assets:
£3,096.4m
Total Borrowings:
£380.0m
Ongoing Charges Ratio (year to December 2013):
0.75%
Net Yield on Ordinary Dividend:
2.0%
Year End:
31 December
Date of Incorporation:
21 April 1888
Dividend Paid:
March, June, September, December
Issued Share Capital:
553,359,146
Source: Alliance Trust

Performance

Cumulative Performance

To 31 January 2015
One Month
One Year
Three Years
Five Years
Total Shareholder Return
Alliance Trust
2.1
14.1
48.1
76.4
Global Sector
2.0
15.0
51.8
80.2
Peer group quartile ranking
Q2
Q2
Q3
Q2
NAV Total Return
Alliance Trust
3.0
15.1
41.5
64.0
Global Sector
2.7
14.0
45.4
69.5
Peer group quartile ranking
Q2
Q2
Q2
Q3
Source: FactSet and Morningstar

Discrete Performance – Total Return (%)

12 Months to 31 January 2015
2015
2014
2013
2012
2011
Total Shareholder Return
Alliance Trust
14.1
11.3
16.6
-0.1
19.2
Global Sector
15.0
13.7
16.1
-5.2
25.2
NAV Total Return
Alliance Trust
15.1
6.6
14.5
-2.3
18.7
Global Sector
14.0
10.9
15.0
-3.8
21.2
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” (13.5%) as the definition varies from company to company.

Sector Allocation†

Sector Allocation
Source: Alliance Trust

Top 20 Equity Investments†


Rank
Name
£m
(%) of
Quoted Equities
1 Visa
109.4
3.7%
2 CVS Caremark
97.6
3.3%
3 Pfizer
94.2
3.2%
4 Prudential
91.9
3.1%
5 Walt Disney
91.0
3.1%
6 Google
78.4
2.6%
7 Accenture
72.4
2.4%
8 Blackstone
64.2
2.2%
9 Express Scripts
64.0
2.1%
10 Amgen
63.3
2.1%
11 Legal & General
60.9
2.0%
12 WPP
60.6
2.0%
13 Wells Fargo
59.3
2.0%
14 National Grid
56.9
1.9%
15 Qualcomm
56.3
1.9%
16 HSBC
56.3
1.9%
17 Swedbank
54.3
1.8%
18 Enterprise Products Partners
50.9
1.7%
19 Intesa Sanpaolo
50.7
1.7%
20 Sanofi
50.7
1.7%
Source: Alliance Trust

The top 10 holdings currently make up 27.8% of net assets.
The top 20 holdings currently make up 46.4% of net assets.

† 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.

Full Portfolio Breakdown

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

Key Trades

Trades
Ambev
No Longer Held
Diageo

Contact


Evan Bruce-Gardyne

Evan Bruce-Gardyne

Director of Investor Relations
Alliance Trust PLC,
8 West Marketgait
Dundee DD1 1QN

Tel +44 (0)1382 321169
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.

Alliance Trust PLC is registered in Scotland No SC1731. Registered office, 8 West Marketgait, Dundee DD1 1QN; is authorised and regulated by the Financial Conduct Authority.
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