LONDON (Alliance News) - Investment firm Alliance Trust PLC on Friday said it underperformed against its benchmark index in 2018 due to a challenging period with failing markets.
Alliance Trust saw a negative equity portfolio return for the year of 4.1%, under-performing against its benchmark index, the MSCI All Country World Index, which made a negative return of 3.3%.
The trust's net asset value negative return was 5.4%, swinging from a total return of 18.55% the year before, and the negative shareholder return for the year was 6.1%.
Net asset value per share as at December 31 was 723.6 pence, down 7.0% from 777.7p on the same date in 2017.
Alliance Trust's share price at the end of 2018 was 688.0p, reflecting a discount to net asset value of 4.9%, widened from 4.0%.
Shares in Alliance Trust were up 0.4% on the day Friday at 739.00 pence, having improved since the year-end.
Alliance Trust declared a final dividend of 3.389 pence per share, taking the total payout to 13.55p, up 3.0% from 13.16p for 2017.
The trust said that 2018 was a challenging year for investment managers, due to only very large cap growth generating significantly positive returns, as a result of economic growth being halted by monetary tightening by various central banks as well as trade tensions between the US and China.
Large cap stocks within Alliance Trust's portfolio stood out as outperformers during the year, whole assets statistically cheap in earnings were the main detractors.
"I cannot end my statement without reference to Brexit. We have considered the implication for the Trust and we have in place a contingency plan to change our Irish Alternative Investment Fund Manager, if required. We do not consider that Brexit, regardless of how it finally materialises, will have a significant impact on the operation of the trust," said Chair Robert Smith.
"Despite the political uncertainties, we are clear on the direction of the Trust and that it will continue to prove a wise choice as a core investment for the long term," Smith added.
