Alliance Trust

Alliance Trust (ATST)

Results for financial year ended 31 December 2019

Results analysis from Kepler Trust Intelligence

Alliance Trust (ATST) released its annual results for the year ended 31 December this morning, recording a strong uptick in NAV per share and even better returns for investors in share price terms thanks to the narrowing of its discount.

Alliance Trust has come a long way since the decision was taken to shake up what was, before its relaunch in 2017, a rather stuffy old trust which did not tend to perform with much panache. The case, we feel, is very much altered.

With the final parts of the overhaul finished in 2019 - the sale of the remaining legacy holdings and the disposal of the Alliance Trust Savings platform - the trust is now a completely new animal, and characteristics of its performance so far suggest the new strategy is finding its feet well.

Of particular note, in our view, is the performance of the trust during 2019 when - in the middle of the year - the dominant 'growth' stocks which have driven performance from many years now lost ground to 'value' stocks which have over the same period been in the doldrums.

The fact that this shift did nothing to stop ATST performing (it continued to deliver sold returns in the new climate) suggests the diversification offered by its approach - and the lack of any one dominant style among the underlying managers - really exists and offers promise to investors at a time when the outlook is very uncertain.

Despite the strength of the trust's recent performance, the current discount of 4.56% is one of the widest in the AIC Global sector.

These factors combined, along with the strong results that the trust has now released and its renewed commitment to a progressive dividend policy, make this an interesting time to consider the trust in our view.

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