Alliance Trust trailed behind its benchmark in the first half of the year, which its chairman blamed on the difficulties in equity markets during June.
According to the £2.7bn trust’s six-month results ending 30 June, it returned 6.6 per cent, just over half that of the MSCI ACWI benchmark, which scored 12 per cent over this period.
Lord Smith of Kelvin, who is chairman of Alliance Trust, said the EU referendum meant the trust’s equity holdings “gave up” the outperformance reported in the first five months of 2016.
This comes after Lord Jacob Rothschild backed out of a proposed takeover plan at the start of June, announcing he had “no intention” to make an offer.
However, on 20 July, Alliance Trust’s share price reached a new record high of 553p, with a net asset value of 626.2p.
The trust also reported a discount of 11.4 per cent over the first six months of the year, compared to 7.9 per cent at the end of December.
According to Lord Smith, this comes at a time of widening discounts for investment trusts in the peer group.
“In volatile markets we continue to make good progress against the initiatives outlined last year to enhance shareholder value,” he said, adding costs are coming down, with the trust’s expenses falling by a third to £7.7m, from £11.1m in the same period last year.
He also said the rest of the business is making “strides towards profitability” now a new board is in place.
The future of Alliance Trust has been under close scrutiny since Elliott Advisors, the trust’s largest shareholder, said it was concerned about the internal management costs and underperformance compared to its peers.
Elliott Advisors called for a restructure of board members, which led to the departure of Alliance Trust chief executive Katherine Garrett-Cox.
The group has been undergoing a strategic review of the group, which Lord Smith said is “progressing well”. The final report from the review is set to be released later this year.
katherine.denham@ft.com
