Part of the excitement of investing is actively running your own portfolio, or a portion of it, digging around company fundamentals, assessing opportunities and threats, and owning a piece of a business that you think will produce attractive returns.
It is why thousands invest in smaller companies and AIM stocks, the ability to test yourself against the market. Another part, arguably far more important, is loading your portfolio with set-and-forget stocks, funds and trusts, where you can relax relatively speaking in the knowledge tried and trusted experts have your back.
Shares believes Alliance Trust (ATST) is among the best options. Founded in the 1880s, it’s been in the investing game not for years, but generations, and has proved itself time and again.
Alliance Trust is a fund of funds, or multi-manager, appointing a team of managers from different fields. They run concentrated portfolios of their very best ideas with the aim of achieving market-beating returns while at the same time giving investors a high level of diversification across different investment styles and geographies.
Top names in the portfolio include Alphabet (GOOG:NASDAQ), Amazon.com (AMZN:NASDAQ) and Nvidia (NVDA:NASDAQ), but also UnitedHealth (UNH:NYSE), Visa (V:NYSE) and Guinness-owner Diageo (DGE).
These might sound like a racy selection with a growth and quality angle, yet interestingly four of the 10 managers enlisted are value experts while CT Fitzpatrick of Vulcan Value Partners has a capital preservation remit.
And it works. Over the seven years to March 2014 since Willis Towers Watson was appointed to lead the investment strategy, the trust’s NAV (net asset value) total return has been 104.2% against 95.7% for the MSCI All Country World Index benchmark.
Over the past five years, the strategy has delivered a 69.3% total return, according to Trustnet data, twice that of its Investment Trust Global benchmark (34.5%), while Morningstar calculates an annualised total return over the past decade of nearly 13% a year.
July’s agreement to merge with Witan Investment Trust (WTAN) will create an investment trust goliath called Alliance Witan with net assets north of £5 billion and a market cap big enough for FTSE 100 inclusion.
What that deal should also do is lower ongoing charges for investors, with a target around the high 50s basis points in future, below Witan’s and Alliance Trust’s current ongoing charge ratios of 0.76% and 0.62% respectively.
The merger is due for a shareholder vote in September 2024 with completion likely some time in October or soon after. Pulling together an investment trust of this scale could present a few challenges, such as a spike in dealing fees as the joint portfolio is finalised and duplication eradicated, but if you’re looking for a set-and-forget balanced option for the years ahead Alliance Trust is one to consider.
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
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