Alliance Trust – Coming into its own

Alliance Trust’s (ATST) diversified blend of active managers could be the key factor behind the trust’s performance being ahead of global equities over multiple time frames. ATST appears to have been able to capture benefits of the sentiment shifts in global equities over the last five years. This performance distinguishes it from its wider peer group, where the presence of strategies with strong stylistic biases may have a factor behind the median return of this group not keeping pace in recent years.

ATST’s manager, Willis Towers Watson, has recently added a dedicated Japanese small-cap value manager Dalton to the roster. Its intention is to not only to capitalise on Dalton’s long history of active management, but also to capture the benefit of structural changes occurring within Japan’s equity market. There has been a trend of improving alignment between corporate management and shareholders, thanks to governance reforms, and more favourable macroeconomic conditions, which the manager expects to continue.