Alliance Trust raised its yearly dividend for the 57th consecutive year due to improved investments in the technology and financial service sectors.
The investment trust announced a payment of 6.34p per share for the fourth quarter last year. This brought the total payment for 2023 up to 25,2p, a 5 percent increase over the previous year.
Alliance, based in Dundee, can trace its origins back to 1888 when it was formed by the merger of 3 mortgage and landowning firms. Since 2017, the stockpicking of Alliance has been outsourced by several external managers.
Willis Towers Watson manages the portfolio, selecting managers from all over the world who choose a global equity portfolio that is concentrated. It has interests in more than 200 stocks, and its stock market value is over £3.3 billion.
Alphabet was the largest stock at the end December, followed by Microsoft and Amazon. The top ten also includes Visa and Mastercard as financial service providers, Nvidia as a software and chip manufacturer, and Meta Platforms which owns Facebook, Instagram, and WhatsApp.
Alliance outperformed the benchmark MSCI All Countries World Index in one, three, and five year performance measurements. In December, it stated that the performance of 2023 was “driven primarily” by stock selection and not country sector or investment styles. This stockpicking ability could be increasingly important during a time of macroeconomic instability.
The company’s outlook for 2024 was as follows: “Although this could be a bumpy year with the Middle East conflict, and the many global elections in the pipeline, we have stockpickers who prioritise long-term fundamental strength of businesses, and they give us different ideas which pay off at various times, making our portfolio resilient to market environments.”
According to research by the Association of Investment Companies, Alliance is among the few investment trusts that have enjoyed uninterrupted dividend growth for more than 50 years. City of London Investment Trust, Bankers Investment Trust are also among the 57-year-old investment trusts.
Alliance announced its intention to extend its dividend streak, saying: “This marks 57 consecutive annual increases, one of longest in investment trust industry. The Board has enough reserves and is confident that the track record can continue in the future.
Alliance Trust shares fell by 0.7 percent, or 8p to £11.74.