Find out more about our performance, with the help of market commentary from our Investment Manager.
For the month of October, the Trust’s Total Shareholder Return and NAV Total Return were -1.1% and -1.7% respectively, outperforming the MSCI All Country World Index (ACWI) benchmark which returned -2.4%.
Alphabet was the largest contributor to the Trust’s portfolio over the month, delivering an absolute return of 10.6%. The company announced financial results for the third quarter in October, surpassing analyst’s expectations for both earnings and revenue growth. Tencent Holdings, a Chinese multinational technology conglomerate, was also a significant contributor to returns over the month, returning 14.6%. The company impressed investors with its robust growth across all segments, particularly in its cloud and gaming services, where revenue has been boosted by a shift to remote working and people spending more time at home during the pandemic. Mastercard was the most significant detractor from performance over the month, returning -14.2% as the company reported net income had fallen 28% from the previous year. Mastercard attributed the underwhelming performance to a cross-border transaction volume decline of 36% as many borders have remained shut due to the pandemic.
Within the Trust’s portfolio, a position in Alcon, a Swiss headquartered medical devices provider and leader in ophthalmology, was initiated in October. Approximately 90% of Alcon’s revenue is tied to recurring sales of medical consumables, and sales growth is driven by ageing population trends worldwide, as well as increasing penetration of healthcare services in emerging markets. The Trust’s position in chemical company Linde was sold to fund the purchase of Alcon.
Finally, we are excited to report that Dan Lascano of New-York based Lomas Capital joined the Trust’s line up of stock pickers in October. Lomas takes a thematic approach to stock selection, that seeks to identify economic and industry trends and, through bottom-up fundamental research, the companies that will benefit most from those trends. More information on Lomas Capital and what differentiates their approach can be found on the Alliance Trust website. Also in October, FPA’s Pierre Py and Greg Herr left to join a new firm and as such, FPA has been removed from the Alliance Trust portfolio.
We have been awarded the Association of Investment Companies’ Dividend Hero award and are proud to have increased our dividend every year for over 50 years, making us one of just four investment trusts to achieve this*. For more information and a full list of qualifying companies, you can visit the AIC’s website. * As at 30 June 2020.
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