Winterflood urges investors to ditch Alliance

Winterflood Investment Trusts (Wins) has voiced its concern over Alliance Trust’s “dull” full-year results, urging investors to make a hasty exit.

Simon Elliott, the head of research at Wins, says the investment trust’s net asset value has increased by just 66%, compared with 85% in the FTSE All-Share index and 79% for the FTSE World ex-UK index.

He says the fund had been characterised by its “conservative investment approach, which protected shareholders’ funds in difficult markets”. (article continues below)

However, Elliott says this was no longer the case given the investment trust’s “struggles” in the second half of the year.

He says: “We believe that this is a function of the considerable change in investment personnel at Alliance over the last few years.”

Elliott adds: “When the buyback policy was introduced last year the stated intention was to move the fund’s discount in line with its peers.

“However the intention now appears to be more focused on reducing discount volatility. Consequently, it would appear that the chances of the discount narrowing materially from here are slim.

“Against this backdrop we would suggest that shareholders take advantage of the buyback policy, while it lasts, to make a hasty exit. There are other, far more attractive, investment trusts available.”