Gregor Stewart

The company’s Net Asset Value (NAV) Total Return reached 14.8% in the second quarter of this year, outperforming its benchmark, the MSCI All Country World Index (MSCI ACWI) which returned 11.1%.

The company’s Total Shareholder Return (TSR) of 11.1% reflected a widening of the discount from 3.5% at the start of the year to 6.7% at the end of June. Between 1 April 2017, when WTW was appointed Investment Manager, and 30 June 2021, the company’s NAV Total Return and TSR were 58.4% and 56.6% respectively, against 57.2% for the benchmark.

The second quarter dividend will be paid in September and the Board expects to extend the company’s 54-year track record of increasing ordinary dividends. The Board is also reviewing the level and funding of the company’s dividend to assess if and how a more attractive and sustainable level of distributions may be provided to shareholders in the future.

The firm also announced that reflecting its goal of transitioning the portfolio to net-zero greenhouse gas emissions by 2050, it will be introducing exclusions on investing in stocks with significant exposure to thermal coal and tar sands.

Gregor Stewart, chairman of Alliance Trust PLC, commented: “We are pleased to have comfortably outperformed our benchmark index in the first half of 2021. With the increasing spread of returns between companies, it is now becoming much more of a stock pickers’ market, which plays to the strengths of our diversified yet high conviction approach to investing.

“We recognise that the Company’s delivery of a sustainable, rising income is particularly important to many of its shareholders and are proud that the Company has been able to increase its total ordinary dividend for 54 consecutive years. With increased dividends expected as a result of the global economy re-opening, and the further flexibility that the conversion of the company’s £645.3m merger reserve provides, the Board has started a review of the level and funding of its dividend payments. It will examine if and how the Company could deliver a more attractive and sustainable level of dividend to shareholders, without changing the investment strategy.

“Although excluding stocks with significant exposure to thermal coal and tar sands will not result in significant divestments, it reinforces our ambition to have the portfolio managed to achieve net zero greenhouse emissions by 2050 or earlier. The portfolio’s carbon footprint is already 32.8% lower than the benchmark and this decision helps to keep us on the right track.”