We've been complaining here about Dundee-based Alliance Trust for years. It's charges have been too high; it has had an utterly unfocused investment strategy; it has been distracted by marginal businesses (a fund management business and a retail platform); and it has had a board wedded to the status quo and a horribly overpaid CEO.
I did at one point think that getting Katherine Garrett-Cox in to take charge would sort things out, but this turned out to be more wishful thinking on my part than anything else. So I'm afraid that a few years ago I lost interest in the company completely.
There are good trusts out there run by good managers who get markets and understand that costs count. So there is no need for us to keep mooning around the lousy ones just because they have romantic histories (Alliance was incorporated in 1888 to invest the money that Dundee's grandees had made in the jute industry).
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
However, things can change. And it looks like they may now be doing just that at Alliance. The fund management business (Alliance Trust Investment) is being sold to Liontrust. The platform business (Alliance Trust Savings ATS) is staying, but is now (finally) profitable. And the core business of the investment trust investing in global stockmarkets is finally to be taken seriously.
Last month the board announced a new investment approach. It is become, effectively, a multi-manager fund and has just announced a starting line up of eight managers (chosen by Willis Towers Watson) known for their stock-picking skills.
Thanks to the scale of both Alliance and WTW, says Alan Brierley of Canaccord Ingenuity, this will mean that investors should get "relatively low-cost access to the best ideas of a highly focused and complementary list of global equity managers; a look-through portfolio of c200 holdings will reflect the best ideas of these leading managers".
"Low cost" in this context means an overall annual cost of about 0.60% which is not bad at all. This is exactly what Alliance should have been doing for the last 20 years low cost but high conviction and well diversified investment for the masses. Still, better late than never.
Brierley now rates the shares a buy and I am adding them to the long list for possible consideration for the MoneyWeek investment trust portfolio.
-
Coventry Building Society bids £780m for Co-operative Bank - what could it mean for customers?Coventry Building Society has put in an offer of £780 million to buy Co-operative Bank. When will the potential deal happen and what could it mean for customers?
-
Review: Three magnificent Beachcomber resorts in MauritiusMoneyWeek Travel Ruth Emery explores the Indian Ocean island from Beachcomber resorts Shandrani, Trou aux Biches and Paradis
-
House prices to crash? Your house may still be making you money, but not for much longerOpinion If you’re relying on your property to fund your pension, you may have to think again. But, says Merryn Somerset Webb, if house prices start to fall there may be a silver lining.
-
Prepare your portfolio for recessionOpinion A recession is looking increasingly likely. Add in a bear market and soaring inflation, and things are going to get very complicated for investors, says Merryn Somerset Webb.
-
Investing for income? Here are six investment trusts to buy nowOpinion For many savers and investors, income is getting hard to find. But it's not impossible to find, says Merryn Somerset Webb. Here, she picks six investment trusts that are currently yielding more than 4%.
-
Stories are great – but investors should stick to realityOpinion Everybody loves a story – and investors are no exception. But it’s easy to get carried away, says Merryn Somerset Webb, and forget the underlying truth of the market.
-
Everything is collapsing at once – here’s what to do about itOpinion Equity and bond markets are crashing, while inflation destroys the value of cash. Merryn Somerset Webb looks at where investors can turn to protect their wealth.
-
Value is starting to emerge in the marketsOpinion If you are looking for long-term value in the markets, some is beginning to emerge, says Merryn Somerset Webb. Indeed, you may soon be able to buy traditionally expensive growth stocks on the cheap, too.
-
ESG investing could end up being a classic mistakeOpinion ESG investing has been embraced with enormous speed and zeal. But think long and hard before buying in, says Merryn Somerset Webb.
-
UK house prices will fall – but not for a few yearsOpinion UK house prices look out of reach for many. But the truth is that British property is surprisingly affordable, says Merryn Somerset Webb. Prices will fall at some point – but not yet.
