Alliance Trust reports a 5.4% total return on net assets and a 10.7% return to shareholders for the year ended 31 December 2015 this compares to the MSCI ACWI benchmark return of 3.8%. The total dividend is 12.43p, up 0.4% on 2014.
Alliance Trust Investments (ATI) generated net inflows of £81m, ending the year with third party assets under management (AUM) of £2.1bn. Losses reduced by 36% to £2.1m. Assets under administration rose by 32% and customer accounts rose by 18%, reflecting strong organic growth and initial benefits of Stocktrade acquisition. Following an external valuation, the fair value of the business has increased to £54m, an increase of 71% from last year.
They initiated the sale of our mineral rights portfolio prior to the year end. Since then, oil prices have slumped, depressing the marketability of these holdings, and no satisfactory offers were received. They will therefore continue to hold these assets until we perceive a positive change in the market.
The top five stock contributors were as follows:
— Visa – the world’s largest payment card processor, which benefited from the move from cash to cards in developed markets and increased penetration of credit cards in developing markets.
— Equinix – a leading data centre, providing collocation, interconnection and managed services to enterprises, content companies and Telco network providers. It benefits from the rapid growth in worldwide demands for data.
— Accenture – one of the leading IT service and consulting firms. It benefits from organisations adapting to structural changes such as the rise of cloud computing and big data.
— Walt Disney – one of the largest media and content companies with leading channels such as ESPN, Disney Channel and ABC.
— Nasdaq – a diversified global exchange which offers trading and clearing services, market data products, technology products, financial index products, listing services and public security services. It benefits from the regulatory drive to increase transparency in financial markets.
The biggest negative contributor was Delta Lloyd where despite improving operational efficiencies within its business, the price of the Dutch insurer suffered as it became apparent that its balance sheet position was much weaker than the market had anticipated. Other detractors were Enterprise Product Partners which suffered from the fall in oil prices; and Ambev with its exposure to a weakening Brazilian economy.
Their favoured stocks in healthcare performed well and contributed positively to performance. They like this sector because it delivers positive growth even in tough economic environments. They focus on healthcare companies which deliver differentiated, life-saving therapies, such as Novo Nordisk; and products and solutions that make healthcare more affordable and more accessible, such as Amerisource Bergen.
Within the technology sector the focus is on thematic drivers such as the growth in cloud computing and the need to invest in digital infrastructure. Accenture and SAP were examples of companies which benefit from these themes. Visa, which they regard as a technology company, performed well and, as the portfolio’s largest position, was a strong contributor to performance.
ATST : Things looking up at Alliance Trust