Alliance Trust has increased its dividend for the 50th consecutive year but again underperformed its benchmark in 2016.
The trust produced an NAV total return of 21.5 per cent last year, well up on the 5.4 per cent recorded in 2015 but 6.5 percentage points below the return for its global equity benchmark.
But the company's ongoing share buyback programme did see its discount to NAV narrow to 4.4 per cent, while annual charges fell from 0.59 per cent to 0.43 per cent, according to full-year results. Charges are set to rise again this year as a result of the planned shift to a multi-manager investment model.
Platform business Alliance Trust Savings saw a 2015 pre-tax loss of £5.1m transform into a profit of £1.2m as it capitalised on the advantage of greater scale. Asset growth at Alliance Trust Investments (ATI), due to be sold to Liontrust next month, turned a £2.1m loss into a £400m profit.
ATI is to be replaced as the main portfolio manager by a panel of managers overseen by Willis Towers Watson. The overhaul was approved by investors last month, a move which also saw activist hedge fund Elliott Advisors leave the shareholder register.
Chairman Lord Smith of Kelvin said: "The board and the new investment manager will now focus on delivering real returns for shareholders through a combination of capital growth and a rising dividend."
