Alliance Trust Savings returns to profits

Alliance Trust Savings has returned to profit with a £1.2m profit last year compared with a £5.2m loss for 2015.

Assets under administration for the firm rose by 60 per cent to £13.6bn in 2016, with a 31 per cent increase in the number of accounts.

Overall, Alliance Trust has improved returns for its shareholders but reported underperformance versus the benchmark in 2016 as it reveals a new investment strategy.

In its full year results, the firm says total shareholder return for the period was 26.4 per cent mostly helped by a narrowing discount, compared to returns of 10.7 per cent in 2015.

The discount to NAV narrowed to 4.4 per cent, down from with 8.1 per cent at the end of 2015 thanks to an “active programme” of share buybacks from the firm.

However, the firm reported net asset value return of 21.5 per cent for 2016, compared to 29.4 per cent return from its benchmark MSCI All Country World Index.

Ordinary dividend for 2016 is 12.774p, which is an increase of 16.4 per cent compared with 2015 when dividend was 10.97p, the firm says.

As part of a new investment strategy, the firm has appointed Willis Towers Watson following the sale of its in house investment management arm to Liontrust Asset Management last year, which is expected to bring over £5m to the firm.

WTW, which will receive the company’s equity portfolio by the end of April, will adopt a multi-manager approach, with five North American and three London-based managers to run the portfolio.