We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

Skip to main content
  • Register
  • Help
  • Contact us

Alliance Trust: April 2023 investment trust update

Investment Analyst Aidan Moyle shares our analysis on the manager, process, culture, cost, ESG integration and performance of Alliance Trust.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

This article is more than 6 months old

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

  • Willis Towers Watson hunt for what they believe to be the best stock pickers and blend them together in this trust
  • The trust’s Investment Committee is supported by 130 analysts and portfolio managers
  • The trust’s impressive dividend record continued after increasing for the 56th consecutive year

How it fits in a portfolio

Alliance Trust aims to grow an investment and provide a rising income over the long term by investing in companies from around the globe. Larger companies from developed markets are the primary focus but it also invests in higher-risk smaller companies and emerging markets.

Historically, the trust invested in a range of different assets alongside company shares, such as bonds, mineral rights, and private equity. Today it adopts a multi-manager approach, which means portions of the trust are run by different fund managers, and it’s solely focused on shares. This means there's plenty of diversification on offer. The trust could be used for income or to bring international diversification to a UK-orientated portfolio.


This trust is managed by nine fund managers, most of which are not accessible for individual UK investors. Each manager creates a portfolio of approximately 20 companies, from wherever in the world they choose. They each have their own strengths, styles and areas of focus which are carefully blended together to create a diversified investment trust.

The managers are selected by the Investment Committee at Willis Towers Watson. The Committee is chaired by Craig Baker, Global Chief Investment Officer, who is supported by co-managers Stuart Gray and Mark Davis. The team can also tap into the expertise of around 130 analysts and portfolio managers from across the globe.


The Investment Committee believes that the majority of stock pickers outperform with their highest conviction investments but hold back returns with their smaller holdings. That’s why they only let most of their underlying managers invest in their 20 best ideas. This number is big enough to spread risk and is also a manageable number of companies to keep on top of.

To whittle down a universe of over 1,600 managers globally, the team conduct detailed analysis to ensure they meet their criteria. Managers must possess a competitive advantage and be able to maintain this edge to stay on top of their game over the long term. The most important aspect is the people themselves. That’s why they spend a great deal of time understanding their motivations, experience, and who’s influenced them throughout their careers. The team also consider how these managers are aligned with their investors, whether that be through equity in the business they work for or a significant co-investment.

Information is widely available so it’s critical for them to understand how these managers are synthesising it better than others. Whilst the number crunching and length of their track record is important, their judgement is largely made through their qualitative work. Their dominant market position means they get great access to meeting stock pickers, their research and are able to sit in on company meetings. This work is ongoing, and they will meet with managers numerous times before taking a view.

Currently they have nine different managers whom the Investment Committee blend together in the trust, ensuring there isn't too much risk at a company, sector, or geographical level. They also want to maintain a balanced portfolio in terms of investment styles.

North America accounts for nearly 55% of the trust making it the largest country allocation, although this is less than the benchmark. In contrast, they invest more in Europe, particularly the UK. Sector-wise, the managers find most opportunities within technology, industrials, and financials. 

In the past financial year, the team terminated their investment with River and Mercantile Asset Management after concerns that a change in ownership could undermine the firms’ investment culture. The capital was redistributed among the remaining stock pickers who have similar characteristics, principally Jupiter Asset Management and Black Creek Asset Management, in order to retain the portfolio's overall style balance.

Some of the managers invest in smaller companies, emerging markets or use derivatives to help them invest, which all increase risk. The trust uses gearing (borrowing to invest) to try to boost returns. Gearing at the end of December was 7.8%. Gearing can also increase losses though, so it’s a higher-risk approach.


Alliance Trust was founded in 1888 and is a constituent of the FTSE 250 index. Today it’s managed by Willis Towers Watson (WTW), a large consultancy firm with over 45,000 employees across 140 countries. This is the first investment trust they’ve managed but WTW has invested this way for much longer on behalf of institutional clients. When selecting managers, they pay close attention to the underlying culture, alignment, and operational resource of the firms they work for.

ESG Integration

Although not an ESG trust, WTW ensure the underlying managers must have a demonstrable framework in place to identify and monitor environmental, social and governance (ESG) factors for the companies they invest in.

WTW allow the managers to manage this risk as they see appropriate as long as there is a suitable framework in place. In 2021, the board also set a target of net zero greenhouse gas emissions from the trust by 2050. Each asset manager that the trust uses must have also set a net zero target.


The net ongoing annual charge is 0.89%. Investors should refer to the latest annual reports and accounts, and Key Information Document for details of the risks and charging structure. If held in a SIPP or ISA, the HL platform charge of 0.45% (capped at £200 for a SIPP and £45 for an ISA) per annum also applies. The platform charge doesn’t apply if the trust is held in a Fund and Share Account.

Investment trusts trade like shares, both a buy and sell instruction will be subject to the HL share dealing charges.


Since WTW was appointed as manager in April 2017, the trust’s performance has been marginally ahead of other globally focused investment trusts. Over this period its share price has grown 59.87%* vs 47.39% for the AIC sector. Its Net Asset Value (NAV) also rose 62.38%. Remember past performance is not a guide to the future.

Over the trust’s last financial year to the end of 2022, its NAV decreased -7.1% vs -8.1% for the AIC Global sector. The share price also decreased -5.8%. However, this was marginally ahead of its benchmark, the MSCI ACWI.

High commodity prices helped the Brazilian oil and natural gas producer Petrobras, and American oil producer ExxonMobil. Both were held by GQG partners and were 2 of the largest contributors in 2022. BAE Systems, the British security and aerospace company also contributed. They benefited from rising demand as the government increased their spending on defence.

In contrast, Salesforce the American cloud-based software company was the largest detractor in 2022. Profitability fell as demand for their software products slowed. Adidas, the German sporting goods maker also detracted in 2022 as weaker demand in China and costs of exiting the Russian market lowered profits.

The total dividend per share for the year to 31 December 2022 was 24.00p, which is a 26% increase on the previous 12-month period. This trust is an AIC ‘dividend hero’ having increased its dividend for the 56th year in a row. At the time of writing the trust trades on a 5.64% discount and has a dividend yield of 2.43%, although remember yields are variable and aren’t a reliable indicator of future income.

Annual percentage growth
Mar 18 – Mar 19 Mar 19 – Mar 20 Mar 20 – Mar 21 Mar 21 – Mar 22 Mar 22 – Mar 23
Alliance Trust PLC 8.84% -12.35% 47.18% 8.22% 1.24%
AIC Investment Trust - Global 8.13% -13.28% 43.79% 1.35% -3.67%

Past performance is not a guide to the future. Source: *Lipper IM to 31/03/2023



Want our latest research sent direct to your inbox?

Our expert research team provide regular updates on a range of investment trusts.

Please correct the following errors before you continue:

    Existing client? Please log in to your account to automatically fill in the details below.

    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.


    Your postcode ends:

    Not your postcode? Enter your full address.


    Hargreaves Lansdown PLC group companies will usually send you further information by post and/or email about our products and services. If you would prefer not to receive this, please do let us know. We will not sell or trade your personal data.

    Our investment trust research is for investors who understand the risks of investing and that investing in investment trusts isn't right for everyone. Investors should only invest if the trust's objectives are aligned with their own, and there's a specific need for the type of investment being made. Investors should understand the specific risks of an investment trust before they invest, and make sure any new investment forms part of a diversified portfolio.

    What did you think of this article?

    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

    Editor's choice – our weekly email

    Sign up to receive the week's top investment stories from Hargreaves Lansdown. Including:

    • Latest comment on economies and markets
    • Expert investment research
    • Financial planning tips
    Sign up

    Related articles

    Category: Shares

    Autumn statement 2023 – NatWest retail share offer

    The UK government could sell its NatWest shares to the public by the end of 2026. We look at how this could work and how you can stay up to date.

    Jason Roberts

    29 Nov 2023 4 min read

    Category: Autumn statement 2023

    Autumn statement top stock market takeaways

    Tax cuts, alcohol and tobacco duty changes, and housebuilding funding, what impact do we see this having on investing?

    Derren Nathan

    28 Nov 2023 5 min read

    Category: Shares

    abrdn Asia Focus investment trust: November 2023 update

    In this update, Investment Analyst Henry Ince shares our analysis on the manager, process, culture, ESG integration, cost, and performance of the abrdn Asia Focus investment trust.

    Henry Ince

    27 Nov 2023 7 min read

    Category: Shares

    How do volatile oil prices impact renewables and what does this mean for investors?

    We share how volatile oil prices impact investors and renewables, and look at what good looks like using Shell and BP as examples.

    Dominic Rowles

    27 Nov 2023 4 min read