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Garrett-Cox: our new-found conviction at Alliance Trust
Katherine Garrett-Cox, chief executive of Alliance, says she is excited to be transforming the investment trust into a global fund of best ideas.
Now investors will be eager to see the outcome of Alliance’s proposed shake up, as it drastically reduces its holdings by half and scraps its regional portfolios.
Katherine Garrett-Cox, chief executive of Alliance Trust, says the trust will be much less weighted in the UK and more focused on the US in technology and oil services.
The trust’s holdings will be reduced from 200 to under 100 holdings and rather than focusing on regional portfolios, the holdings will be centrally managed.
The £2.1 billion trust has a record of 45 years of increasing its dividends and is considering paying dividends out of realised capital gains, as proposed by Laxey Partners and under new tax changes made earlier in the year.
Garrett-Cox said: ‘The trust has been rebuilding dividend reserves and putting money back in the kitty and investing in companies that have the power to grow.
‘A more prudent way of looking at things is the probably the preferred way of doing things. The key thing for us is we want to be sure that we can keep paying the dividends for a very long time.’
Shares are currently trading at 375p, a 15% discount to their NAV value of 442p per share.
However the trust has previously traded on a 19% discount and Garrett-Cox says share buy-backs have succeeded in stemming discount volatility. The trust has bought about 5% of shares back this year.
The trust’s performance is also picking up with total returns of 22% from its investment portfolio over the past year, which just beats the FTSE All Share's total return of 21%.
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From the Forums
by Gavin Lumsden on Apr 16, 2014 at 15:17