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Monthly Factsheet

31 May 2015


Price: 509.5p NAV (inc Income): 585.1p Discount: 12.9%

Commentary for May 2015

Market Commentary

The MSCI All Country World Index was up 0.7% in Sterling terms over the month. There was considerable volatility during the month as some emerging markets reacted to weaker than expected US GDP data; Brazil fell 11% and the MSCI South East Asian index was off nearly 3%. In the UK, market concerns of a hung parliament did not materialise and a small post-election rally reflected the relief. The UK election result has added some uncertainty to financial markets with the prospect of an In Out referendum on Britain’s EU membership.

There was significant divergence at a Global sector level with the best performing being Health Care (+3.5%) and Information Technology (+2.2%). Worst performing sectors were Energy (-4.8%) and Telecommunication Services (-1.6%).

Portfolio and performance update

Within the energy sector, we sold Noble Energy and ENI, and bought a new position in Statoil. Noble Energy recently acquired Rosetta Resources, in a deal over which we have concerns. ENI was sold over concerns whether they will be able to bring their Libyan production to the levels required to support the dividend. We view Statoil as best able to adapt to the new oil price, with a strategy focused on supporting its dividend and improving returns in a low oil price environment. In the Technology sector we bought Seagate, a company delivering high returns and an attractive dividend yield, with future growth underpinned by demand for its Hard Disk Drive (HDD) products. These moves do not alter the overall sector positioning of the equity portfolio, where the top three sectors account for over 60%.

The discount widened over the month from 12.1% to 12.9%. The reduction in gross gearing from 12.0% to 11.8% was driven by portfolio performance and not any change in asset allocation. The Total Shareholder Return is ahead of MSCI All Countries World Index over 3 and 5 years

Outlook

The equity portfolio continues to be positioned to benefit from long- term structural themes. Most of the companies in which we invest have international exposure which provides protection from regional cyclicality or country specific political uncertainty. We focus on analysing companies on a bottom-up basis and we continue to see opportunities in well-managed companies with strong fundamentals and robust business models. This approach allows us to value companies on their own merits with particular emphasis on their ability to generate above average returns over the long term. Our investment process allows us to identify and then manage a diversified portfolio that is positioned to generate sustainable returns for our shareholders.

Asset Allocation


Assets
% of Net Assets
Net Equity Exposure
97.1
Fixed Income
5.5
Private Equity
4.2
Operating Subsidiaries
1.8
Property
0.1
Cash & Other Net Assets
3.1
Gross Assets
111.8
Gearing
(11.8)
Net Assets Inc Income
100.0
Source: Alliance Trust

Key Information


Market Capital:
£2,814.9m
Total Assets:
£3,605.4m
Net Assets:
£3,225.4m
Total Borrowings:
£380.0m
Ongoing Charges Ratio (year to December 2014):
0.60%
Net Yield on Ordinary Dividend*:
1.9%
Year End:
31 December
Date of Incorporation:
21 April 1888
Dividend Paid:
April, June, September, December
Issued Share Capital:
552,334,146
Source: Alliance Trust

* Estimated 12 month forward yield, including special dividend, payable on 30 June 2015: 2.5%

Performance

Cumulative Performance

To 31 May 2015
One Month
Six Months
One Year
Three Years
Five Years
Total Shareholder Return
Alliance Trust
0.5
7.3
15.2
60.8
79.6
Global Sector
2.1
8.1
18.3
68.6
81.2
NAV Total Return
Alliance Trust
1.1
6.6
14.5
51.3
62.5
Global Sector
1.3
7.0
16.2
56.4
68.4
Source: FactSet and Morningstar

Discrete Performance – Total Return (%)

12 Months to 31 May
2015
2014
2013
2012
2011
Total Shareholder Return
Alliance Trust
15.2
2.6
36.0
-8.9
22.6
Global Sector
18.3
8.8
31.0
-11.4
21.3
NAV Total Return
Alliance Trust
14.5
3.1
28.2
-6.6
15.0
Global Sector
16.2
6.9
25.9
-7.9
16.9
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” (12.5%) as the definition varies from company to company.

Sector Allocation (%)†

Sector Allocation
Source: Alliance Trust

Top 20 Equity Investments†


Rank
Name
£m
% Quoted equities
1 Pfizer
103.2
3.3%
2 Visa
102.5
3.3%
3 CVS Caremark
100.1
3.2%
4 Walt Disney
95.6
3.1%
5 Prudential
92.2
3.0%
6 Accenture
81.4
2.6%
7 Blackstone
74.2
2.4%
8 Express Scripts
68.2
2.2%
9 Amgen
63.9
2.1%
10 WPP
63.6
2.0%
11 Wells Fargo
62.9
2.0%
12 Qualcomm
61.8
2.0%
13 Intesa Sanpaolo
61.2
2.0%
14 Legal & General
60.5
1.9%
15 HSBC
57.5
1.8%
16 National Grid
56.8
1.8%
17 Google
56.3
1.8%
18 Sanofi
52.7
1.7%
19 Roche
51.7
1.7%
20 Swedbank
51.6
1.7%
Source: Alliance Trust

The top 10 holdings currently make up 27.2% of net assets.
The top 20 holdings currently make up 45.6% 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

New Holdings
Seagate Technology, Statoil
No Longer Held
Noble Energy, Eni

Source: Alliance Trust and FactSet

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.
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