Alliance Trust Performance

[scotia]

The major headline in the business section of the (Glasgow) Herald this morning was "Recast Alliance Trust fails to match index". It reports that in the year to December 2018 the Alliance Trust generated a net asset value total return of negative 5.4% compared to the MCSI All Country World Index of negative 3.3%. When it moved to a multi-manager investment approach in April 2017, the Alliance Board forecast that its return would exceed the index by at least 2% on a rolling 3-year basis. It would be nice to think that all the managers in its multi layers will now be on the bread line. But I doubt it.

[Dod101]

I agree Scotia but actually the result was not bad compared to say Temple Bar which I am beginning to think I should ditch. This new approach by Alliance (of which I am sceptical by the way) has only been in place for a short time and most of the managers take a long term approach so it is a bit unfair to expect anything dramatic in 18 months or so.

My misgivings about their approach is that it has resulted in anything but a 'conviction' approach certainly at the top level with an enormous number of individual holdings. Each manager is restricted to a small number of shares and so is said to have a 'conviction' approach. Meanwhile they continue to ditch 'non core' holdings, rightly or wrongly.

I will probably attend the AGM in April and will be interested to hear what they say.

Dod

[Noslien]

I am afraid to say that Witan, which follows a similar multi-manager approach, has also done badly; even worse that Alliance. I think it is about time I got rid of them.
Noslien

[Dod101]

I no longer follow Witan but they had a very poor patch some years back and then they adopted the multi manager approach which did well for some time. I am sorry they are now not doing well and would like to know why. Must take a look.

Dod

[scotia]

most of the managers take a long term approach so it is a bit unfair to expect anything dramatic in 18 months or so.

Agreed! So I'm still holding on to my modest Alliance investment. Like yourself, I also have concerns about their multi manager approach. With too many cooks I suspect the return will return to the mean - i.e. the index, but I'll give it a try. I think it is unlikely to compete with F&C or SMT or Fundsmith or Lindsell Train Global. Clearly the Herald was not impressed.