Growth stalls at Alliance Trust

GROWTH at the £3.2 billion Alliance Trust was held back in the first six months of this year as markets moved from growth to value stocks.

Alliance Trust Chief Executive Officer Katherine Garrett-Cox speaks at the Commonwealth Business Conference in Glasgow. Picture: Reuters

The investment group’s holdings in companies such as Visa, SAP and Pfizer were hit during the six months to 30 June amid the sell-off in growth stocks. The trust also sold out of some stocks towards the end of the period after identifying specific factors hampering their share price performance.

This led to a total return of 0.4 per cent by Alliance Trust. That was well below the 3 per cent average gain by its AIC Global Sector benchmark.

Chief executive Katherine Garrett-Cox said: “Over the past six months, equity markets have favoured value stocks, as opposed to the growth companies towards which our equity portfolio is more heavily weighted. We have also seen some stock-specific underperformance in our portfolio and have taken steps to address this, selling out of certain holdings and increasing our position in those where we have a higher level of conviction in the investment case.” She added that the company remained “committed” to its investment approach.

Funds under management at Alliance Trust Investments grew 2 per cent during the six months. Operating losses fell 5 per cent to £1.6 million on the back of a rise in third-party revenue.

Assets under administration at Alliance Trust Savings were 10 per cent higher at £5.9bn, but it reported an operating loss of £400,000. Excluding any special pay-outs, the dividend for 2014 is expected to rise by 3 per cent to 9.83p.