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Monthly Factsheet

31 March 2016


Price: 502.5p NAV (inc Income): 565.5p Discount: 11.1%

31 March 2016

Market & Portfolio Commentary

Performance and Portfolio 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 and is slightly behind the index but ahead of the Global investment trust sector over the past six months. The discount has widened over the month to 11.1% compared to 9.4% at the end of February. Recent market volatility has adversely impacted the whole sector with discounts wider in general. We will continue to target a lower discount through a combination of improving investment performance and share buy-backs. Gearing remains broadly unchanged at 13.2%.

Portfolio turnover remains low but we have sold our holding in Deutsche Post and replaced it with Microsoft, the US listed technology company. We think they are well positioned to take advantage of the market moves to cloud technology and we believe in the long-term fundamentals of the company. Our conviction in Deutsche Post has been undermined by a number of recent fundamental changes.

Market Commentary

The MSCI All Country World Index (MSCI ACWI) was up 4.2% in March with market volatility remaining a feature. Markets got a boost from an upturn in the oil price and some global commodities rebounding from previous lows. Economic and political uncertainties remain a concern and although the MSCI ACWI has moved 3% higher over the quarter, market confidence remains fragile.

All global sectors, with the exception of Health Care, delivered a positive return in March. The best performers were Materials (+6.8%), Energy (+6.4%) and Information Technology (+6.0%) with the worst being Health Care (-0.5%) and Consumer Staples (+2.8%).

Outlook

Political and economic uncertainty looks set to continue for some time. Over the long term these factors are not the key drivers in stock specific returns. Our bottom-up investment process allows us to value companies on their own merits and on that basis, we continue to see opportunities in well-managed companies with strong fundamentals and sustainable business models. Our philosophy and process identifies these high quality companies and enables us to make decisions as to their value and possible inclusion in the Trust’s unconstrained and diversified equity portfolio. We believe that it is these companies that give us the opportunity to generate superior returns over the long term for our shareholders.

Buy Backs

During the month we bought back 2.8m shares (0.5%) of the issued share capital at the cost of £13.8m.

Asset Allocation


Assets
% of Net Assets
Net Equity Exposure
102.9
Fixed Income
1.1
Private Equity
4.2
Operating Subsidiaries
2.5
Cash & Other Net Assets
2.5
Gross Assets
113.2
Gearing
(13.2)
Net Assets Inc Income
100.0
Source: Alliance Trust

Key Information


Market Capital:
£2,602.7m
Total Assets:
£3,314.0m
Net Assets:
£2,924.0m
Total Borrowings:
£390.0m
Ongoing Charges Ratio (year to December 2014):
0.59%
Net Yield:
2.2%
Year End:
31 December
Date of Incorporation:
21 April 1888
Dividend Paid:
March, June, September, December
Issued Share Capital:
517,955,637
Source: Alliance Trust

Performance

Cumulative Performance

To 31 March 2016
One Month
Six Months
One Year
Three Years
Five Years
Total Shareholder Return
1.7
11.3
26.3
56.7
NAV Total Return
4.0
9.9
-0.9
20.3
41.9
Equity portfolio gross return*
4.1
11.2
0.2
22.5
N/A
MSCI ACWI Total Return (£)
4.2
11.2
-0.6
26.2
47.8

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 March
2016
2015
2014
2013
2012
Total Shareholder Return
1.6
15.0
8.0
19.7
3.7
NAV Total Return
-0.9
17.9
3.0
17.8
0.1
Equity portfolio gross return*
0.16
17.3
4.3
N/A
N/A
MSCI ACWI Total Return (£)
-0.6
19.0
6.7
17.0
0.1
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” (14.7%) 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
8.42
4.75
12.84
4.00
0.01
0.06
0.07
Consumer Staples
8.53
4.83
10.76
2.78
0.03
0.17
0.20
Energy
4.95
1.48
6.53
6.39
-0.03
-0.23
-0.26
Financials
23.72
4.92
20.51
5.40
0.04
-0.12
-0.08
Health Care
15.68
0.28
11.88
-0.46
-0.17
0.11
-0.06
Industrials
8.27
7.14
10.61
4.48
-0.00
0.21
0.20
Information Technology
19.02
4.71
14.72
5.97
0.07
-0.23
-0.16
Materials
4.35
4.60
4.71
6.85
-0.01
-0.09
-0.10
Telecom Services
3.29
2.12
3.99
2.85
0.01
-0.02
-0.01
Utilities
3.77
7.57
3.42
4.90
0.00
0.09
0.10
Total
100.00
4.11
100.00
4.21
-0.04
-0.06
-0.10
Source: Factset and Morningstar
Performance attribution is calculated over 12 months to 31 March 2016.

Top 20 Equity Investments†


Rank
Name
£m
% Quoted equities
1 Visa
94.6
3.2
2 Pfizer
92.2
3.1
3 Accenture
88.0
2.9
4 CVS Caremark
79.2
2.6
5 Amgen
72.0
2.4
6 Reckitt Benckiser
71.9
2.4
7 TJX Cos
71.3
2.4
8 Blackstone
68.5
2.3
9 Legal & General
67.8
2.3
10 National Grid
67.5
2.3
11 American Tower
62.6
2.1
12 Prudential
59.8
2.0
13 CSL
59.8
2.0
14 SS&C Technologies
59.1
2.0
15 Equinix
58.3
1.9
16 Toronto-Dominion Bank
56.5
1.9
17 Daikin Industries
56.4
1.9
18 Roche
55.4
1.8
19 Danaher
54.5
1.8
20 Wells Fargo
54.5
1.8
Source: Alliance Trust

The top 10 holdings currently make up 25.9% of net assets.
The top 20 holdings currently make up 45.1% of net assets.

Full Portfolio Breakdown

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

Key Trades

Largest new holdings
Microsoft
No Longer Held
Deutsche Post
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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