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Monthly Factsheet

31 January 2016


Price: 489.7p NAV (inc Income): 548.4p Discount: 10.7%

Commentary for January 2016

Portfolio and Performance Update

Total Shareholder Return remains ahead of MSCI All Country World Index over 1, 3 and 5 years. NAV performance has been impacted by the recent market volatility but remains ahead of the index and the Global growth sector over the past year. The discount remained in a narrow range and closed January at 10.7%. Strong investment performance and share buy-backs allowed it to narrow significantly since our 1st October announcement when it stood at 12.4%. Month end gross gearing increased slightly to 13.4% from 13.0% at the end of December.

Portfolio turnover remains low with no significant changes. The equity portfolio is invested in 60 high conviction holdings - the top 20 making up 46.8%. Financials, Information Technology and Health Care are the three largest sector weights representing 59.6% of the overall equity exposure. The regional exposure remains unchanged.

Market Commentary

It has been a very volatile start to the year with global equity markets concerned about slowing growth in China, falling commodity prices and the impact interest rate policy may have on some emerging economies. The financial position of some European banks also emerged as a source of unease. The MSCI All Country World Index fell in 2.3% in January and is now down 11% since its peak last April. The valuation of stocks has also been under scrutiny with some commentators suggesting precipitous falls in valuations. We do not prescribe to this hypothesis and although there will be further volatility, we think there are many opportunities at a stock specific level.

Over the month the worst performers at Global sector level were Financials (-6.3%), Materials (-6.1%) and Health Care (-4.2%). Best performers were Utilities (+4.9%), Telecommunications (+3.9%) and Consumer Staples (+3.7%).

Outlook

2016 is likely to be a challenging year with political and economic uncertainty likely to cause further market volatility. The current divergence of sector returns has once again emphasised how important it is to focus on the factors that drive stock specific returns. Our bottom up analysis allows us to value companies on their own merits and we continue to see opportunities in well managed companies with sustainable fundamentals. The result is a quality portfolio well positioned to deliver what our shareholders expect – increased value in their investments through capital growth and a rising dividend. We will continue to actively manage the portfolio by focusing on the companies we want to invest in for the long term.

Buy Backs

In January we bought back 2.0m shares (0.4%) of the issued share capital at the cost of £9.4m.

Asset Allocation


Assets
% of Net Assets
Net Equity Exposure
101.5
Fixed Income
2.5
Private Equity
4.4
Operating Subsidiaries
2.6
Cash & Other Net Assets
2.4
Gross Assets
113.4
Gearing
(13.4)
Net Assets Inc Income
100.0
Source: Alliance Trust

Key Information


Market Capital:
£2,567.9m
Total Assets:
£3,260.9m
Net Assets:
£2,870.9m
Total Borrowings:
£390.0m
Ongoing Charges Ratio (year to December 2014):
0.60%
Net Yield:
2.1%
Year End:
31 December
Date of Incorporation:
21 April 1888
Dividend Paid:
March, June, September, December
Issued Share Capital:
524,385,261
Source: Alliance Trust

Performance

Cumulative Performance

To 31 January 2016
One Month
Six Months
One Year
Three Years
Five Years
Total Shareholder Return
-5.3
-0.1
2.7
30.6
52.3
NAV Total Return
-2.5
-2.3
0.2
23.9
38.6
Equity portfolio gross return*
-2.0
-1.3
1.5
26.5
N/A
MSCI ACWI Total Return (£)
-2.3
-2.3
-0.8
27.4
44.2

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 January
2016
2015
2014
2013
2012
Total Shareholder Return
2.7
14.2
11.3
16.6
-0.1
NAV Total Return
0.2
16.0
6.6
14.5
-2.3
Equity portfolio gross return*
1.5
14.5
8.8
N/A
N/A
MSCI ACWI Total Return (£)
-0.8
17.5
9.3
14.9
-1.5
Source: FactSet and Morningstar
*The equity portfolio was restructured in December 2011 and equity portfolio returns prior to December 2012 are not comparable.

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” (14.2%) as the definition varies from company to company.

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.

Top 20 Equity Investments†


Rank
Name
£m
% Quoted equities
1 Visa
115.8
4.0
2 Pfizer
97.1
3.3
3 Accenture
92.9
3.2
4 Prudential
77.7
2.7
5 CVS Caremark
75.6
2.6
6 Amgen
75.2
2.6
7 Wells Fargo
72.3
2.5
8 CSL
68.9
2.4
9 National Grid
68.4
2.4
10 NASDAQ
65.4
2.3
11 Roche
59.3
2.0
12 American Tower
59.3
2.0
13 Legal & General
58.3
2.0
14 Equinix
56.2
1.9
15 Reckitt Benckiser
54.1
1.9
16 Vodafone
52.6
1.8
17 SS&C Technologies
52.0
1.8
18 Blackstone
52.0
1.8
19 SAP AG
51.8
1.8
20 Daikin Industries
51.2
1.8
Source: Alliance Trust

The top 10 holdings currently make up 28.0% 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
-
No Longer Held
-
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. Neither Alliance Trust Investments nor Alliance Trust PLC are 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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