The Trust’s NAV rose 12.2% and its share price increased 12.4% during the course of the year. Following the purchase of Aviva’s socially responsible investment arm the Trust’s AUM has increased by a significant 248% to £1.9bn.
The Trust’s four regional portfolios were consolidated into one global portfolio, while it adopted a higher conviction investment approach and reduced its holdings to around 100 stocks in 2012. Strong performance has continued into 2013, with its share price rising 16% and NAV 13%.
Alliance Trust chief executive Katherine Garrett-Cox, said: “Alliance Trust has undergone significant change over the last year and I am pleased that the actions which we have taken across the business have resulted in the good results that we are announcing today. Investment performance continues to improve and the equity portfolio generated double digit returns last year.’
“Our subsidiaries have made strong progress over the year. Alliance Trust Savings is now well positioned to perform profitably and pick up market share as a result of the changes that are being implemented as part of the retail distribution review.”
Income from investment trusts
Alliance Trust is the latest in a line of trusts to announce a dividend increase for number of consecutive years. City of London Investment Trust recently announced its 46th consecutive dividend increase too.
Other trusts with long dividend increase track records include Foreign and Colonial (42 years), Brunner Investment Trust (41 years), and JPMorgan Claverhouse Investment Trust (40 years). According to data provided by the Association of Investment Companies (AIC), 29 member companies have increased their dividends consecutively for the last ten years.
Annabel Brodie-Smith, communications director AIC, said: “With interest rates at record lows, investors need to put their money to work in order to achieve any kind of yield. So it is encouraging to see that investment company investors are being rewarded for taking on the additional risk that comes with equity investment, with so many of Britain’s oldest, largest and well-known investment companies announcing dividend increases year after year.
“Investment companies have a structural advantage over other types of collective investment because they are able to squirrel away some of the income they receive each year into their revenue reserves to help boost dividends in more difficult years. This is known as ‘dividend smoothing’ and means that many investment companies are able to continue to pay and boost dividends through both the good times and the bad.”
The AIC today launched a new website to aid in the education of advisers and retail investors on investment trusts, with a dedicated area for financial advisers.
