The Lemon Fool

Creating a £5bn IT (3.5bn +1.5bn).

I note that ATST (which I hold) has outperformed WTAN over the past 5 years (TR basis).

Positive sounding comments about the dividend.

https://www.investegate.co.uk/announcem ... i-/8278137

Interesting - only yesterday I was considering an investment in Alliance.

I couldn't see an entry for them on the AIC website, which made me think that something was up, but that is probably a coincidence and/or me failing to search properly.

dmukgr wrote:Interesting - only yesterday I was considering an investment in Alliance.

I couldn't see an entry for them on the AIC website, which made me think that something was up, but that is probably a coincidence and/or me failing to search properly.

ATST are an AIC " Dividend Hero" , so it is listed on their site.

https://www.theaic.co.uk/income-finder/dividend-heroes

And yet I can't find it through the search on this page - https://www.theaic.co.uk/income-finder/income-builder

dmukgr wrote:And yet I can't find it through the search on this page - https://www.theaic.co.uk/income-finder/income-builder

It is there..!




Or, by typing ATST in the search

Hint: https://www.theaic.co.uk/ATST

Graphs comparing Alliance v Witan over 10,5,3 and 1 years.

Alliance has outperformed over all periods, although over the last 6 months Witan have narrowed the gap.

https://ibb.co/MnRskmB
https://ibb.co/Cmgrw0z
https://ibb.co/XJnv6yY
https://ibb.co/wgcFBX7

Witan's OCF at 1.86% looks like its from another age (Alliance at 0.93% is at the edge of acceptability for me). Multi-manager approaches are bound to have extra layers of cost compared to single managers, but what matters is performance net of costs, not costs per se.

As the new Alliance Witan investment strategy is going to be based on a continuation of the current Alliance strategy, then as a holder of Alliance I am content, and should benefit from management economies of scale via a lower OCF (they are aiming for 'high 50s'). Witan holders should gain the most....they are on a 7.8% discount v 5.6% at Alliance, as well as Witan having higher fees. Can understand why Witan initiated a management review that ultimately led to these proposals.

* OCF figures taken from each Trusts Cost Disclosures document on Interactive Investor.

mc2fool wrote:Hint: https://www.theaic.co.uk/ATST

I have realised the issue now - I had it already in my trial portfolio so I couldn't bring it up in the search to add it, as it was already there.

Thanks everyone for trying to help.

dmukgr wrote:

mc2fool wrote:Hint: https://www.theaic.co.uk/ATST

I have realised the issue now - I had it already in my trial portfolio so I couldn't bring it up in the search to add it, as it was already there.

Thanks everyone for trying to help.

I did a Virtual Portfolio once. It outperformed my real one so much that it was depressing so I never did it again.

The AIC says Alliance's 5 year dividend growth is 13.2% pa which looks pretty amazing.

I unfortunately hold WTAN, which has not performed very well over the last five years. Here's how new shares in Alliance Witan will be issued to WTAN shareholders:

"New shares in Alliance Witan will be issued to Witan shareholders on a Formula Asset Value ("FAV")-to-FAV basis. FAVs will be calculated using the respective net asset values of each company as at the relevant calculation date, adjusted for the costs of the Transaction, the allocation of the benefit of both the Manager Contribution and the discount on the Cash Option, any dividends and distributions declared by either company but unpaid as at the date of the FAV calculation, and taking account of the liquidator's retention (for Witan)."

dundas666 wrote:The AIC says Alliance's 5 year dividend growth is 13.2% pa which looks pretty amazing.

True but the yield is only 2.1%, and on an annualised basis growth of 13.2% over 5 years is 2.5% per year.

You wouldn’t buy Alliance for the measly dividend. The annual increase is just an outcome that’s engineered by holding back prior year dividends to drip feed an artificial annual increase.

Many Trusts have a fascinating history….Witan was formed to manage the investments of 1st Baron Farringdon and its managers eventually became Henderson which is now Janus Henderson who manage City Trust amoung others.

https://en.wikipedia.org/wiki/Witan_Investment_Trust

AndrewInDevon wrote:

dundas666 wrote:The AIC says Alliance's 5 year dividend growth is 13.2% pa which looks pretty amazing.

True but the yield is only 2.1%, and on an annualised basis growth of 13.2% over 5 years is 2.5% per year.

As dundas666 wrote, their 5 year dividend growth is 13.2% pa. Should have gone to Specsavers maybe?

However, a good part of that was a pretty big leap, some 60%ish, in 2021. https://www.theaic.co.uk/companydata/alliance-trust/dividends

AndrewInDevon wrote:Witan's OCF at 1.86% looks like its from another age (Alliance at 0.93% is at the edge of acceptability for me.
...
* OCF figures taken from each Trusts Cost Disclosures document on Interactive Investor.

Thanks for saying where you got the OCFs from. The AIC website says WTAN ongoing charge plus performance fee = 0.96% (still too high!).

mc2fool wrote:

AndrewInDevon wrote:True but the yield is only 2.1%, and on an annualised basis growth of 13.2% over 5 years is 2.5% per year.

As dundas666 wrote, their 5 year dividend growth is 13.2% pa. Should have gone to Specsavers maybe?

However, a good part of that was a pretty big leap, some 60%ish, in 2021. https://www.theaic.co.uk/companydata/alliance-trust/dividends

Yup, mea culpa!
You're right, they changed their policy in 2021 to step up their dividend. It's yield is still low in absolute terms, but in line with global equities at c2.5%

https://ibb.co/VYV5HHc

Could other investment trusts merge?

I was thinking of F&C and Bankers. They would make a good fit.

clissold345 wrote:

AndrewInDevon wrote:Witan's OCF at 1.86% looks like its from another age (Alliance at 0.93% is at the edge of acceptability for me.
...
* OCF figures taken from each Trusts Cost Disclosures document on Interactive Investor.

Thanks for saying where you got the OCFs from. The AIC website says WTAN ongoing charge plus performance fee = 0.96% (still too high!).

The II one includes transaction charges and borrowing costs. Also known to me as "Investment decisions" rather than true costs. The 0.96% also includes 0.2% in underlying fund cost. To my mind these are also "investment decisions" the costs are netted off in the performance and the 0.2% does not go to the managers yacht fund. This is the same old, unfair, story of double counting making them look expensive.

AndrewInDevon wrote:
Witan's OCF at 1.86% looks like its from another age (Alliance at 0.93% is at the edge of acceptability for me). Multi-manager approaches are bound to have extra layers of cost compared to single managers, but what matters is performance net of costs, not costs per se.
.[/i]

Again, a third of this cost is the borrowing charges (0.31%) . Hence AIC OCF = 0.62%. Something the manager gets no benefit from. In fact the terms of the debt are so good that the fair value of the assets are actually 5p more when accounting for it.

It is frustrating that they have to disclose an inflated figure when the reality of the situation, and what actually gets shaved off in expenses, is quite different.