Alliance Trust: Dundee investment firm boss hails results amid challenging conditions

The man who oversees billions being invested for Dundee finance firm Alliance Trust has hailed the company’s performance last year.

The firm delivered a net asset value return of -7.1%, while its total shareholder return  was -5.8%.

Despite this loss in value, Alliance Trust outperformed its benchmark, the MSCI All Country World Index, which returned -8.1% for the same period.

It also outperformed its peers in the Association of Investment Companies (AIC) global sector where the average TSR was -23.2%.

‘Significant level of out-performance’

The Dundee investment house’s multi-billion-pound portfolio is overseen by Willis Towers Watson.

Craig Baker, global chief investment officer, said the performance benefited from the portfolio’s balanced style exposures.

He said: “The results compared to the AIC global sector average shows our approach of letting stock selection drive everything and not having a style bias really helps.

“A lot of managers were really hurt by the switch from growth having driven markets to value doing better in 2022.”

He said a decline in performance across the technology sector was also a big factor.

He said: “For a lot of people the challenge was the big swing where the sector that had been driving everything for a number of years – technology – was suddenly doing badly.

“At the same time the energy sector, which has done badly for a long time, was doing well.

“If you look at our performance relative to the peer group, the level of out-performance is very significant.

“At a NAV level 13% above the sector average shows that others found it a tough year.”

Impact on market from war in Ukraine

Mr Baker said the war in Ukraine had not had a direct impact on performance, but that it was the major catalyst for the impact on the energy market.

“It has been a big part of the energy crisis in the UK and across Europe. That’s a big part of the inflationary issues in the UK.

“It is the reason why the energy sector did well.

“The invasion of Ukraine has accelerated some things that were doing well, but it really has accelerated the energy sector in the UK and Europe.”

Meanwhile, Alliance Trust plans to extend its 56-year track record of increasing dividends.

A total dividend of 24p per ordinary share for the year to 31 December 2022. That marks a 26% increase from the year before.