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Monthly Factsheet

31 October 2015


Price: 504.0p NAV (inc Income): 555.6p Discount: 9.3%

Commentary for October 2015

Market Commentary

Despite concerns over slower economic growth in the US, China and other major economies, global equity markets rebounded strongly in October. The US stock market led the way with the MSCI US Index rallying 6.2% and the MSCI All Country World Index 5.8% in Sterling terms. A combination of strong earnings and the US rate hike being postponed triggered strong inflows into equities. The market expects the Fed to raise rates in December but, if that does not happen, then it is unlikely to happen before March 2016. Global sector returns showed marked divergence, mainly driven by some unexpectedly good earnings numbers from US companies. The best performers in October were Energy (+8.8%), Materials (+8.2%) and Information Technology (+8.2%). Worst performers were Utilities (+1.8%), Health Care (+4.1%) and Consumer Staples (+4.2%).

Portfolio and Performance Update

Gross gearing fell from 14.9% to 14.1% and the total net exposure to global equities has risen from 99.6% to 100.4 of net assets. We continue to work towards having a greater focus on global equities, as described in our statement on 1 October and, as part of a phased withdrawal from Fixed Income, we have reduced our bond exposure from 4.9% to 3.7%. This has been achieved by raising £30m from our holding in the Alliance Trust Dynamic Bond Fund. We have also taken the opportunity of the market rally to sell three holdings; Qualcomm, Praxair and Petrofac and add to existing higher conviction holdings. The discount narrowed sharply over the month from 12.4% to 9.3%. We are committed to keeping the discount in single figures through consistent performance and share buy backs if required. Total Shareholder Return remains ahead of MSCI All Country World Index over 1, 3 and 5 years. NAV performance has significantly outperformed the index over the past year.

Outlook

The Trust’s portfolio continues to be positioned to benefit from long-term structural themes. We continue to look for opportunities to invest in high quality, well-managed companies with strong sustainable fundamentals. Our investment approach achieves this through greater understanding of how the businesses operate and close links to management. This allows us to value companies on their own merits, with particular emphasis on their ability to generate above average returns over the long term. 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 progressively rising dividend.

Buy Backs

During the month we bought back 4,121,861 shares (0.75%) of the issued share capital at the cost of £20.4m.

Asset Allocation


Assets
% of Net Assets
Net Equity Exposure
100.4
Fixed Income
3.7
Private Equity
4.2
Operating Subsidiaries
2.0
Property
0.2
Cash & Other Net Assets
3.6
Gross Assets
114.1
Gearing
(14.1)
Net Assets Inc Income
100.0
Source: Alliance Trust

Key Information


Market Capital:
£2,763.0m
Total Assets:
£3,470.7m
Net Assets:
£3,040.7m
Total Borrowings:
£430.0m
Ongoing Charges Ratio (year to December 2014):
0.60%
Net Yield:
2.0%
Year End:
31 December
Date of Incorporation:
21 April 1888
Dividend Paid:
April, June, September, December
Issued Share Capital:
548,212,285

Performance

Cumulative Performance

To 31 October 2015
One Month
Six Months
One Year
Three Years
Five Years
Total Shareholder Return
10.0
1.0
11.7
47.7
63.8
NAV Total Return
6.1
-2.3
7.7
35.8
45.4
Equity portfolio gross return*
6.2
-2.6
7.0
37.5
N/A
MSCI ACWI Total Return (£)
5.8
-5.0
4.1
40.8
53.9

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 October 2015
2015
2014
2013
2012
2011
Total Shareholder Return
11.7
5.9
24.8
11.4
-0.4
NAV Total Return
7.7
4.2
20.9
10.0
-2.7
Equity portfolio gross return*
7.0
4.8
22.6
N/A
N/A
MSCI ACWI Total Return (£)
4.1
8.8
24.3
9.4
0.0
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” (15.6%) 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.
* All countries with exposure of greater than 0.05% shown.

Top 20 Equity Investments†


Rank
Name
£m
% Quoted equities
1 Visa
123.2
4.0%
2 Pfizer
102.1
3.4%
3 Walt Disney
96.1
3.2%
4 Accenture
89.1
2.9%
5 Prudential
88.7
2.9%
6 CVS Caremark
85.4
2.8%
7 Amgen
73.6
2.4%
8 Wells Fargo
73.6
2.4%
9 National Grid
65.9
2.2%
10 Legal & General
64.4
2.1%
11 Blackstone
61.8
2.0%
12 American Tower
60.6
2.0%
13 Intesa Sanpaolo
58.8
1.9%
14 NASDAQ
57.6
1.9%
15 Sanofi
57.2
1.9%
16 Reckitt Benckiser
55.3
1.8%
17 Danaher
52.0
1.7%
18 Vodafone
51.7
1.7%
19 Swedbank
51.6
1.7%
20 Continental
51.6
1.7%
Source: Alliance Trust

The top 10 holdings currently make up 28.3% of net assets.
The top 20 holdings currently make up 46.6% 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
Qualcomm, Praxair, Petrofac
Source: Alliance Trust

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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