More than meets the eye

LAST UPDATE 21 SEPTEMBER 2020

Due to the high alpha approach, capital appreciation often gains the headlines, however ATST is also one of the most dependable income sources in the investment trust universe…

Alliance Trust (ATST) is one of the largest trusts in the investment companies universe, sitting in the FTSE 250 with gross assets of around £3bn.

The management of the fund was changed in April 2017 from an in-house investment team to an externally managed multimanager approach. Willis Towers Watson (WTW) were appointed to oversee it, with the investment committee, led by Craig Baker, selecting the external managers for different parts of the underlying portfolio. WTW gives the managers mandates, with few restrictions, and each has the aim of creating a ‘best ideas’ portfolio of between 10 and 20 stocks from anywhere in the world. Through this approach, the team hope that can generate the levels of alpha associated with concentrated portfolios, without the risk profile of a single portfolio. WTW actively manages the allocations between managers to ensure that performance is primarily driven by stock selection, rather than by sector, style or country weightings.