2 Avrio Anoikti Society: Session Content 1.Alliance Trust, Company Overview Karen McNab 2.Investment Strategy Alex Ebeling 3.Asset Allocation Rebecca Fenton 4.Starting Your Own Portfolio
3 Alliance Trust - What We Do Alliance Trust PLC is a self-managed investment trust A FTSE 250 company It has been investing since 1888 It is the largest generalist UK investment trust by market value on the London Stock Exchange Current shareholder base of 593,301,146
5 What is an Investment Trust? A Collective Investment Vehicle where: Investors capital is pooled together from a fixed number of shares. Hence, investment trusts are known as a closed-ended funds. Capital is managed either in house or outsourced, the manager invests these funds in different asset classes across the globe. They are traded on stock exchanges - ours is listed on the LSE. They can borrow a large percentage of capital from banks to leverage positions; this is called gearing.
6 Alliance Trust Investments Launched in February 2009 Since launch has raised in excess of £380 Million Provides a range of core, long term investment funds (OEICs) 5 Equity Funds: North America, Japan, Asia Pacific (ex-Japan), Europe, UK and Global. 1 Fixed Income Fund: Monthly Income Bond Fund Managed by highly experienced, tight-knit investment teams
7 Alliance Trust Savings ATS is a leading wealth products and platform provider. ATS offers access to a wide range of investment opportunities including: Funds Global Equities Investment Trusts These investments can be held in a range of ‘wrap’ accounts including: SIPP’s (Self Invested Personal Pension) ISA’s (Individual Savings Account) Investment Dealing Accounts Exchange Traded Funds Fixed Interest Securities Property
8 Investment Strategy High Level Overview Active vs. Passive Management Top Down vs. Bottom Up Value vs. Growth Asset Class Gearing Hedging (Derivatives) Short Term vs. Long Term Open vs. Closed Ended
10 Investment Strategy Global Thematic Opportunities Fund Unconstrained Any Region, Sector, Market Cap or Benchmark etc. Identifying Structural Themes E.g. Demographic or Environmental changes Exploit Short-Term Overreactions Benchmarked against the MSCI All Country World Index
11 Global Thematic Opportunities Fund Example of Structural Themes
12 Investment Strategy UK Equity Income Fund Focus on capital growth and income generation. Concentrated portfolio, constrained by a high dividend bias. Provides dual return to investors through regular income payments and the prospect of capital accumulation. Benchmarked against the FTSE All Share
13 Asset Allocation Equity exposure concentrates on four geographical regions: -UK -North America -Europe -Asia Continual work on streamlining portfolio to deliver improved investment performance
18 Top 10 Holdings Stock Country of ListingSector Value £m % of Quoted Equities Royal Dutch ShellUKOil & Gas Producers67.12.90% GlaxoSmithKlineUKPharmaceuticals & Biotechnology58.32.50% BPUKOil & Gas Producers50.82.20% HSBCUKBanks44.62.00% Rio TintoUKMining42.71.80% British American TobaccoUKTobacco38.81.70% BHP BillitonUK/AustraliaMining381.60% BGUKOil & Gas Producers37.31.60% PfizerUSAPharmaceuticals & Biotechnology35.51.50% DiageoUKBeverages31.81.40%
19 Derivatives & Hedging Use derivative instruments to hedge, enhance and protect positions, including currency exposures Limited to assisting with market timing for efficient portfolio management Typically invest in futures in order to adjust regional weightings Currency fluctuations can have a significant impact on the value of overseas holdings -Monitor movements -Take action to protect against them Example -Borrow in Euros with the view the currency would weaken -Reduces exposure to weakening Euro and protects value of our underlying equity holdings -Forward exchange contract to the Japanese Yen -When UK Pound strong, increase weighting to US Dollar, unwind as Pound weakened -Strategies added to performance
20 Starting Your Own Portfolio Stick to sectors and companies you know about! Try to take a top-down and bottom-up point of view. Keep current equity market trends in mind. Avoid stock tips from newspapers and popular publications.