2018 Report and Accounts

Chairman's Statement

2018 was a challenging year for global equities, with most markets falling and many active investment managers struggling to outperform. Like others, we trailed our benchmark, partly due to market returns during much of the year having been driven by a narrow group of very large companies. Although a number of our eight managers owned some of these companies and benefited from their share prices appreciating, others avoided them because they thought they were overvalued.

Our strategy of appointing a number of managers with different styles and approaches to select their best stocks means we will never have a very concentrated exposure to one segment of the market. By investing more broadly across companies, countries and sectors, we should avoid the short-term performance highs and lows driven by particular market factors. In the long run, though, we expect our portfolio to outperform the market. Since we adopted our investment approach in April 2017, the equity portfolio has beaten its benchmark.

During the year, we made further progress in the disposal of our remaining non-core investments. This will enable us to focus on our equity portfolio which we are confident is well positioned for future gains.

Source: Alliance Trust PLC, Annual Report and Finanical Accounts 2018

Lord Smith of Kelvin, Chairman
8 March 2019

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