The £3.2bn Alliance Trust investment trust’s results for the first six months were “disappointing” and it is not doing enough to compete with its peers, according to Winterflood Securities.
In the first six months of 2014 Alliance Trust’s net asset value (NAV) rose by 0.3 per cent, while its benchmark, the MSCI AC World index, increased by 3.2 per cent.
The lacklustre performance was a result of the fund’s equity portfolio, which fell by 0.4 per cent.
Winterflood warned that fund manager Ilario Di Bon’s investment approach “has struggled to generate numbers that will differentiate the trust”.
The fund’s discount is wider than its peers and Winterflood said it expects it to remain this way for some time so it “struggle[s] to identify reasons to buy Alliance Trust at present”.
However, there are some signs of improvement, according to Winterflood. The fund has recently changed its charging structure which has led to a book that has greater growth potential and the socially responsible investing (SRI) team is gaining new mandates.
The fund has also announced that it will issue unsecured US private placement loans at the end of July, which Winterflood believes “makes sense give interest rate expectations”.
However, these positives are not enough to “compensate for its uninspiring performance record”, according to Winterflood.
Alliance Trust declined to comment.
