Scotland’s biggest investment trust has shifted its investment portfolio, reducing its exposure to Asia and upping holdings in makers of smart phones and gadgets.
Under the shift in investment strategy run by Ilario di Bon, the Alliance Trust’s new head of equities, the fund said it does not expect a European “meltdown” and has invested £35 million in the region as “valuations for many companies are now looking increasingly compelling”.
In a market update, the Dundee-based group said increased its exposure to tech giants Qualcomm and Samsung, which it funded by selling down telecoms firms such as Vodafone and industrials. It added it has also increased its exposure to North American companies, including iPhone maker Apple.
Total assets were at £2.6 billion, down from £2.9bn six months ago. The company’s discount to net asset value – an issue which has subjected the firm to challenge from activist investors – remained stubbornly high at 15.1 per cent.
During the three months to 30 September 2012, the trust’s total shareholder return was 5.7 per cent, which put the conservatively-managed fund in the second quartile against their global investment trust peers. This closely watched measure was guardedly welcomed by analyst.
Simon Elliott, head of research for investment trust specialist Winterflood, said the company’s investment performance in the quarter was “reasonable” but added that the “longer-term performance numbers are less exciting”.
He added: “Given the extent of the changes that have been made to the portfolio recently, it is clear that there is still work to be done. Ilario Di Bon has been given the responsibility for the equity portfolio and he will be under pressure to deliver.”