Less stocks, more diversification

Alliance Trust has protected shareholders from losses in a tough year for investors...

Taking into account all the macroeconomic chaos we’ve seen over the past 12 months, if one were to imagine a trust that invests in global equities and had used historic levels of gearing to do so, the odds are you’d think it would have taken a major hit to its net asset value (NAV) and share price in 2022.

Looking at the market as a whole that wouldn’t be a bad call to make. In the 12 months to 22/08/2022, closed-ended funds in the AIC’s ‘Global’ sector averaged NAV total return declines of close to 18% and share price falls, on a total return basis, of 22.9%.

Unsurprisingly then, Alliance Trust (ATST) sticks out relative to its peers when looking at the highly volatile period we’ve gone through and continue to be stuck in. In the year-long period to 22/08/2022 the trust had delivered a small NAV total return of 0.6%. Its shares rose, also on a total return basis, by 0.5% over the same period.