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Monthly Factsheet

31 March 2015


Price: 509.5p NAV (inc Income): 587.6p Discount: 13.3%

The Board of Alliance Trust unanimously recommends that shareholders VOTE AGAINST the Elliott resolutions to appoint three additional directors to the Board.

Market & Portfolio Commentary

Market

The MSCI All Country World Index was up 2.6% in Sterling terms. Expectations are for a modest interest rate rise in the US but timing has been pushed out into 2016.

Global sector returns have been diverse with the best performing being Health Care (+5.6%) and Consumer Discretionary (+3.6%). The worst performers were Materials (-1.3%), Telecommunication Services (+0.2%) and Energy (+0.4%). Our investment approach and resultant sector positioning benefitted from these moves.

Portfolio and performance update

The equity portfolio, which is measured against the performance of the MSCI All Country World Index, has outperformed that index over 1, 3 and 6 months, which reflects the time since Peter Michaelis assumed the role of Head of Equities and Simon Clements was appointed to manage the equity portfolio of the Trust. This builds on their long-term track record of managing portfolios using their established investment process. In the last six months, Simon has concentrated the portfolio further, reducing the number of holdings from 84 to 69. In the last quarter, the changes have been to create positions in Equinix, Ambev, SS&C Technologies and Norsk Hydro. These have been funded by sales in stocks where the investment thesis had been reviewed and was less compelling than previously believed. These moves leave the portfolio unchanged in terms of its overall investment themes. The portfolio turnover over the previous 12 months has been 27%, although the majority of the trading took place as the portfolio was updated following Simon Clements’ appointment. If we exclude this portfolio realignment, the average monthly turnover was 1.4%, or an annualised rate of 18%. The table below shows our top 20 holdings which now represent 45.3% of the portfolio.

Gross gearing fell slightly over the quarter from 12.6% to 11.7% and the total global equity exposure remains at 97% of NAV. The asset allocation mix is broadly unchanged over the quarter and remains consistent with our view that there are significant opportunities for equity investors over the medium and longer term balanced with our requirement for yield. At a sector level our investments in Financials, Information Technology and Health Care represent 61% of the overall portfolio.

Outlook

The Trust’s global equity team continues to look for opportunities to invest in well-managed companies with strong sustainable fundamentals. This can only be achieved by a thorough understanding of how the businesses operate and through close links to management. This emphasises how important it is to remain focused on the factors that drive stock specific returns over a three to five year time horizon. We remain convinced that the investment process and the portfolio are well positioned to deliver what our shareholders expect – increasing the value of their investments through capital growth and a rising dividend.

Alliance Trust Investments will continue to focus on the opportunities that our unique market position and strong investment performance have developed. Alliance Trust Savings is entering a new phase of growth and our new customer interface combined with the radical changes to the pensions market give us the opportunity to capitalise on the investments we have made in technology and human capital.

This year will be an exciting period for both our subsidiaries and we remain confident that they will deliver long-term value for our shareholders.

Buy Backs

During the month we bought back 745,000 shares (0.13%) of the issued share capital at the cost of £3.70m.

Asset Allocation


Assets
% of Net Assets
Net Equity Exposure
97.0
Fixed Income
5.5
Private Equity
4.3
Operating Subsidiaries
1.8
Property
0.1
Cash & Other Net Assets
3.0
Gross Assets
111.7
Gearing
(11.7)
Net Assets Inc Income
100.0
Source: Alliance Trust

Key Information


Market Capital:
£2,814.1m
Total Assets:
£3,618.7m
Net Assets:
£3,238.7m
Total Borrowings:
£380.0m
OCR (for the year to December 2014):
0.60%
Net Yield:
1.9%
Year End:
31 December
Date of Incorporation:
21 April 1888
Dividend Paid:
March, June, September, December
Issued Share Capital:
552,334,146
Source: Alliance Trust

Performance

Cumulative Performance

To 31 March 2015
One Month
Six Months
One Year
Three Years
Five Years
Total Shareholder Return
Alliance Trust
3.6
13.8
14.8
48.5
68.2
Global Sector
1.9
12.1
17.0
51.6
69.1
Peer group quartile ranking
Q1
Q2
Q2
Q3
Q2
NAV Total Return
Alliance Trust
3.1
14.6
18.0
43.3
53.0
Global Sector
2.3
12.1
16.1
45.6
57.6
Peer group quartile ranking
Q1
Q1
Q1
Q2
Q3
Cumulative Performance
Source: FactSet and Morningstar

Discrete Performance – Total Return (%)

12 Months to 31 March
2015
2014
2013
2012
2011
Total Shareholder Return
Alliance Trust
14.8
8.0
19.7
3.7
9.3
Global Sector
17.0
11.7
16.0
-1.7
13.4
NAV Total Return
Alliance Trust
18.0
3.0
17.8
0.1
6.8
Global Sector
16.1
8.4
15.9
-2.0
10.0
Source: FactSet and Morningstar

Alliance Trust Discount

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” (13.4%) as the definition varies from company to company.

Regional Allocation Breakdown (%)† *

Regional allocation

Source: Alliance Trust and FactSet

Sector Allocation (%)†

Sector Allocation
Source: Alliance Trust and FactSet

Stocks ranked by contribution to return (%)


Strongest Contributors
Closing Weight
Total Return
Contribution to Return
AmerisourceBergen
1.67
32.75
0.30
Blackstone
2.21
22.93
0.28
Pfizer
3.46
18.18
0.26
Walt Disney
2.98
17.17
0.25
Intesa Sanpaolo
1.85
21.86
0.20
Novo Nordisk
1.25
34.23
0.19
Humana
1.03
30.36
0.17
Prudential
2.99
13.75
0.16
CVS Caremark
3.37
12.91
0.14
Petrofac
0.59
35.56
0.12

Weakest Contributors
Closing Weight
Total Return
Contribution to Return
Charoen Pokphand Foods
-
-10.92
-0.12
Toronto-Dominion Bank
1.10
-5.51
-0.12
Qualcomm
2.03
-1.53
-0.16
Norsk Hydro
0.89
-12.50
-0.16
HSBC
1.84
-3.52
-0.16
Ambev
0.86
-12.25
-0.17
PT Perusahaan Gas Negara
0.54
-20.41
-0.19
Delta Lloyd
0.96
-10.08
-0.19
Enterprise Products Partners
1.62
-3.57
-0.19
National Grid
1.83
-5.82
-0.24
Source: Factset and Morningstar
Weights as at COB 31 March 2015. Geometric attribution period COB 31 December 2014 – COB 31 March 2015.

Top 20 Equity Investments†


Rank
Name
Sector
£m
(%) of
Quoted Equities
1 Pfizer
Health Care
106.2
3.4
2 CVS Caremark
Consumer Staples
103.7
3.3
3 Visa
Information Technology
100.3
3.2
4 Prudential
Financials
94.6
3.0
5 Walt Disney
Consumer Discretionary
93.4
3.0
6 Accenture
Information Technology
81.5
2.6
7 Express Scripts Holding
Health Care
69.6
2.2
8 Blackstone
Financials
67.7
2.2
9 Amgen
Health Care
67.1
2.1
10 Legal & General
Financials
63.4
2.0
11 WPP
Consumer Discretionary
63.3
2.0
12 Qualcomm
Information Technology
63.1
2.0
13 Wells Fargo
Financials
62.9
2.0
14 Intesa Sanpaolo
Financials
59.4
1.9
15 Google
Information Technology
58.8
1.9
16 Sanofi
Health Care
54.7
1.8
17 Swedbank
Financials
54.1
1.7
18 HSBC
Financials
53.0
1.7
19 National Grid
Utilities
52.6
1.7
20 Danaher
Industrials
50.1
1.6
Source: Alliance Trust

Top 10 holdings currently make up 27.0% of quoted equities. Top 20 holdings currently make up 45.3% of quoted equities.

† 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.

Full Portfolio Breakdown

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

Key Trades

Largest new holdings
Tencent, TJX
No Longer Held
Wisconsin Energy, Intuitive Surgical, Charoen Pokphand Foods

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.

Share Investment


Alliance Trust invests primarily in equities and fixed income and aims to generate capital growth and a progressively rising dividend from its portfolio of investments. Alliance Trust PLC currently conducts its affairs so that its shares can be recommended by IFAs to ordinary retail investors in accordance with the FCA’s rules in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future.

The shares are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are shares in an investment trust. The shares in the Trust may also be suitable for institutional investors who seek a combination of capital and income return. Private investors should consider consulting an independent financial adviser who specialises in advising on the acquisition of shares and other securities before acquiring shares.

Investors should be capable of evaluating the risks and merits of such an investment and should have sufficient resources to bear any loss that may result.

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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