By Jean-Baptiste Andrieux, Reporter, Trustnet, 18 April 2024:
F&C Investment Trust and Alliance Trust are among the largest investment trusts in the IT Global sector and have a long history dating back to the 19th century, making them popular choices as one-stop-shops for core exposure to global equities.
Investors might have a hard time choosing between the two, as they seem very similar at first glance. Both take a multi-manager approach, are well diversified and are aligned with global benchmarks from a country and sector perspective..
Trustnet asked experts to explain the differences between the two portfolios, to share which one they favour and to suggest other trusts to complement them.
How do Alliance Trust and F&C differ from each other?
Although both funds use a multi-manager structure, there are nuances. F&C invests in funds run by 13 managers, resulting in a portfolio comprising approximately 400 stocks, whereas Alliance Trust uses segregated mandates to get access to its 10 managers’ top 20 holdings..
Which trust do experts favour?
James Carthew, head of research at QuotedData, said Alliance Trust changed its strategy seven years ago, which was a turning point. The board appointed Willis Towers Watson to run the trust in 2017 and became more aggressive about tackling the discount. Around £1bn worth of shares have been bought back since then.
“Even though Alliance Trust’s new investment strategy is only seven years old, the trust’s returns have already made up the underperformance earlier in the decade. Its 10-year returns have now pulled ahead of F&C’s (12.6% per annum on average to F&C’s 12.0%),” Carthew said.
“It feels to me as though the gap will only get wider. If I had to choose between the two, Alliance Trust is the obvious favourite.”
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