Alliance Trust’s results for 2014 show its net asset value rising by 5.8%. the annual dividend was increased to 12.438p, 14.3% up year on year, and this helped push the fund’s total return on net assets to 8.1%. The share price return was 9%. Unfortunately this is somewhat behind the 11.2% return generated on the MSCI AC World Index, nevertheless the statement says that, on the back of these numbers, Alliance Trust ranks in the second quartile of funds in its peer group.
The manager says that growth companies, which it is weighted towards, underperformed over the year and this accounts for much of their underperformance. However, surprisingly given the level of detail that they go into every other aspect of the business, the statement is a bit light on performance attribution figures and there’s no indication of which investments contributed to their underperformance. They cut their exposure to companies exposed to the oil price. They made one new commitment within their private equity portfolio, Leapfrog Financial Inclusion Fund II which is investing in financial, mainly insurance, businesses in Asia and Africa. They sold their office in Edinburgh during the year and now just hold one office in Glasgow.
The fund, which now is adopting an “Environmental, Social and Governance” stance as a way of differentiating itself from some of its peers, had a somewhat ironic boost in income last year from the Mineral Rights it holds in the US which generated returns from shale oil drilling.
ATST : Alliance Trust lags MSCI World by 3% but still 2nd quartile