Popular investment vehicle Alliance Trust (ATST) has announced a modest but meaningful shake-up of its portfolio.

The FTSE 250 constituent invests in global equities across a range of industries and sectors through a ‘manager of managers’ approach. Following an overhaul in 2017, the trust gives investors relatively low-cost exposure (with an ongoing charge of 0.62%) to 10 leading fund managers selected by Willis Towers Watson, the manager of the trust.

These managers run concentrated portfolios of their very best ideas and by pursuing this approach, Alliance Trust hopes to achieve a high level of diversification across different investment styles and geographies. On a 10-year view it has achieved a creditable annualised return of 12.9%. The shares trade at a modest 3.4% discount to NAV (net asset value).

Following news of Ben Whitmore’s imminent departure from Jupiter Fund Management (JUP) the trust has taken the decision to make a switch to ARGA Investment Management. Jupiter accounted for 9% of the portfolio at the last count, while the trust has said ARGA will have an 8% weighting.

Numis analyst Ash Nandi comments: ‘Ben is a highly-rated manager and therefore the switch away from Jupiter to ARGA shouldn’t be a surprise. ARGA also takes a value-orientated approach, meaning the manager change does not result in any meaningful change in style allocation for the fund.’ 

As Nandi says, ARGA IM is a global value-focused manager. Its overriding strategy is to capitalise on situations where the market has overreacted to negative news flow and has mistaken temporary share-price stress for an irretrievable situation. 

Founded in 2010 by chief investment officer A. Rama Krishna, the company has some £11.8 billion of assets under management and operates from locations in the US, India and UK. The table shows the allocations in Alliance Trust following the switch out of Jupiter.

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