Changing Times INVESTING for a NEW WORLD ORDER?

SUMMER 2018

Changing times INVESTING FOR A NEW WORLD ORDER?

alliancetrustsavings.co.uk Welcome to the latest edition of Taking Stock.

Changing times

If this edition had a theme tune it might be something like Bob Dylan’s 1960s classic The Times They Are A-Changin’. Or at least that’s how it feels to many of us.

US protectionism, Trump-style diplomacy, North Korea, Iran, Syria, Russia, China, Brexit, Facebook, Cambridge Analytica. These have all been headline makers for 2018 so far, and some have undoubtedly been implicated in increased market volatility.

Around the world the political and economic power of nation states has always ebbed and flowed. Alliances are made and undone. And the fortunes of individual corporations rise and fall. But the question for investors today is, are we just looking at a variation on a theme of business as usual for the world’s established economic power base? Or is something else going on? Are we on the cusp of some more fundamental change in the world economic order?

Keeping ahead of the curve

Views on this matter because searching for growth necessarily involves looking ahead and understanding where the longer-term opportunities and threats are likely to be.

In this edition of Taking Stock our expert contributors explore the potential implications of the developing picture. From how it’s influencing investment decisions today, to steps any investor can take to make the most of their money in uncertain times.

As always, I hope you will find it an informative read.

If you have any feedback or suggestions for future editions, please get in touch.

Sara Wilson Head of Platform Proposition Alliance Trust Savings

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Contents

04 Looking beyond the noise 16 Quality control: a re-evaluation of risk Sam Morse, Portfolio Manager for Fidelity European Values As monetary policy becomes less benign to markets, Bruce PLC, explains why he continues to look beyond the economic Stout, Senior Investment Manager at Murray Income Trust PLC and political noise, concentrating instead on the real-life explains why it is so important for investors to ensure that progress of listed businesses in Europe, and their capacity companies are genuinely delivering high and sustainable for consistent dividend growth. earnings rather than trading on past success.

06 Why aren’t we Facebook friends? 18 Appetite for disruption The so-called FANG companies (Facebook, Amazon, Netflix With much of the developed world looking forward to longer and Google) have been favoured by many investors in recent life expectancy, Tony DeSpirito, Portfolio Manager for the years. But Alasdair McKinnon of The Scottish Investment Trust BlackRock North American Income Trust plc explains why he takes the contrarian view. He reviews why these tech believes that companies embracing disruptive technologies behemoths may now be under threat. could be a valuable source of future income.

08 In search of safety? 20 Growth from different perspectives Earlier this year many investors flocked to ‘safety’ as the When assessing the growth potential of a company in a prospect of a US vs China trade war and tensions over Syria globalised world, the managers of Monks Investment Trust triggered a wave of unrest. Alliance Trust Savings’ Sara Wilson believe it is ridiculous to focus on headquarter location, or takes a closer look and reviews some of the routes traditionally to assume it shares similar characteristics with others in the used for managing downside risk. same sector. James Budden of Baillie Gifford elaborates.

10 Finding opportunities in the chapters of Brexit 22 The search for future winners ahead of the crowd Mark Barnett, Head of UK Equities at Invesco Perpetual, is not Lucy Macdonald, Portfolio Manager for The Brunner Investment discouraged by the Brexit gloom and doom narrative apparently Trust PLC considers the longevity of Investment Trusts, how undermining confidence in the UK economy. He highlights three successfully many have navigated the market conditions history sub-plots that he believes, by driving and distorting UK markets, has presented them and the potential benefits to investors of are creating opportunities for investors. a robust, bottom-up approach to stock selection.

14 Still finding winners in the UK 24 Tips for uncertain times Simon Gergel, Portfolio Manager at The Merchants Trust PLC No one can ever be quite sure what political and economic explains why he sees the corporate appetite for UK PLC developments will mean for markets. But there are some undiminished by Brexit and other political shocks, backing basic tips that can help you make the most of your money the Trust’s own view that the UK stock market is, in fact, one whatever the future may bring. Alliance Trust Savings’ of the cheapest in the developed world right now. James McCafferty explains.

Taking Stock alliancetrustsavings.co.uk | 3 The approach I take to managing Fidelity European Values PLC is to look beyond the economic and political noise and concentrate on the real-life progress of listed businesses across this large and diverse region. In running the Trust I focus on researching and investing in stocks I believe can grow LOOKING their dividends consistently, irrespective of the prevailing economic backdrop. History BEYOND shows that these companies tend to outperform the market over the longer-term. THE NOISE:

ompanies with the cushion of a healthy and growing dividend tend to be resilient FIDELITY Cduring periods of macroeconomic uncertainty. By investing in solid and sustainable dividend-paying stocks, I believe Fidelity European Values PLC provides core defensive exposure to EUROPEAN European equities. Since the launch of Fidelity European Values over 27 years ago, Europe has witnessed its fair share of political and economic upheaval. It’s important to note though, that however significant VALUES PLC changes might be on the political stage, the corporate sector tends to carry on regardless. By Sam Morse, April 2018

4 | Taking Stock alliancetrustsavings.co.uk “...I focus on researching rather than just capital growth. This change was to Sam Morse acknowledge my focus on dividend income as well and investing in stocks Portfolio Manager as capital growth and did not relate to any change Fidelity European Values PLC I believe can grow their in investment approach. A reallocation of fees and and Fidelity European Fund expenses from revenue to capital will also positively dividends consistently, affect the level of future dividend pay-outs. A lower Sam joined Fidelity in 1990 and 0.75% management fee on assets over £400m spent seven years with the company irrespective of the prevailing has taken effect from April 2018 and represents as a research analyst, covering pan- economic backdrop.” a valuable saving for shareholders. European retail stocks, and then as a portfolio manager, running funds including the Fidelity Income Plus What will unfold in 2018? I am naturally cautious and I am not inclined Fund, the Fidelity Growth and Income Fund and the Fidelity to take large bets against the market in individual European equities have underperformed recently MoneyBuilder Growth Fund. He then sectors or countries, preferring instead to focus as stock markets have been impacted by weak left Fidelity to be Head of UK Equities on companies which I believe will be able to economic data and concerns over the pace of at M&G. Sam returned to Fidelity in outperform their competition over the longer-term. interest rate increases in the US. The valuation 2004 to manage UK equities for My process is therefore built from the bottom up, of the European stock market remains high and institutional clients. He managed the looking at individual businesses, but keeping an eye I believe that this and expectations for continued Fidelity MoneyBuilder Growth Fund on the wider market to avoid unexpected pitfalls. earnings expansion leaves the market vulnerable from December 2006 for three years before becoming portfolio manager to earnings disappointments and geo-political for the Fidelity European Fund, Identifying future dividend growers shocks. Markets have been aided by liquidity which he continues to run today. injections from global central banks and may On this basis I look to build a portfolio of 50-60 He assumed responsibility of Fidelity be impacted by liquidity withdrawal as 2018 European Values PLC in January attractively valued companies, with strong balance unfolds, particularly if this happens more quickly 2011.Sam has an MBA from sheets and a track record in cash generation, than expected. In such circumstances my hope is INSEAD and a BA from the which have the potential to grow dividends that my concentration on fundamentally strong University of North Carolina. consistently on a three to five-year view. This businesses will help performance of the Trust. type of company offers a good combination Naturally the continuing process of Brexit of fundamental value and therefore downside protection, as well as good growth prospects likely represents an additional uncertainty at present. to be identified by the market in future. Historic While the first stage of negotiations focused data shows that companies of this nature tend to on the UK’s financial liability has concluded, outperform, however the trick is to identify those the more complex discussions about trading future dividend growers before they have done so relationships in the future are only getting – and importantly, before the rest of the market. started. It is quite possible that the arrangements This requires time and discipline from me and our will vary by sector, and they may yet fail to be analyst team in London and throughout Europe. agreed in their entirety. Clearly there is potential for more geo-political shocks to come. How all this plays out is anyone’s The Trust: Adapting to change guess. I’ve always felt trying to predict these cycles At the recent Annual General Meeting shareholders or time the market is something of a mug’s game. This article is issued by approved proposals by the Board of the Trust So I remain focused on the individual companies Financial Administration to amend the investment objective to achieving we see before us, aiming to outperform across Services Limited, authorised long-term growth in both capital and income, the full market cycle. and regulated in the UK by the Financial Conduct Authority. Fidelity, Fidelity International, Important Information: Past performance is not a reliable indicator of future results. This information is The Fidelity International logo not a personal recommendation for any particular investment. If you are unsure about the suitability of an and F symbol are trademarks investment you should speak to an authorised financial adviser. The value of investments can go down as of FIL limited. Fidelity well as up so investors may get back less than they invest. Investors should note that the views expressed Investment Trusts are managed may no longer be current and may have already been acted upon. by FIL Investments International. CSO8711/1018 Overseas investments are subject to currency fluctuations. The investment trust can gear through the use of bank loans or overdrafts and this can be achieved through the use of derivatives. Where this is the case, This is a financial promotion their use may lead to higher volatility in the Net Asset Value and Share Price. The latest annual reports and from FIL limited. factsheets can be obtained from our website at www.fidelity.co.uk/its or by calling 0800 41 41 10. The full prospectus may also be obtained from Fidelity.

Taking Stock alliancetrustsavings.co.uk | 5 WHY AREN’T WE FACEBOOK FRIENDS? Unlike many, we don’t have holdings in Facebook, Amazon, Netflix or Google – the so-called FANGs. It’s not that we don’t see their merits: we like our YouTube clips and Prime deliveries as much as anyone. But as contrarian investors, we’re looking for the best balance of risk and reward we can find.

6 | Taking Stock alliancetrustsavings.co.uk WHY AREN’T WE FACEBOOK FRIENDS?

e don’t see that balance in the FANGs. the US Federal Trade Commission. Google is also Alasdair McKinnon As at the end of March 2018, shares in the regulators’ sights, receiving a €2.4 billion Manager Win Facebook and Amazon cost more fine from the European Commission in September. The Scottish Investment Trust than 5 times as much as they did five years Some are asking whether behemoths such previously. You’d need to pay 11 times more as Amazon should be broken up. FANG Alasdair joined the Company in for Netflix shares than in 2013, and even proponents often cite the ‘network effect’ – 2003 and became Manager in 2015. Google costs over 2.5 times more. i.e. being the only game in town and having massive scale. But monopolies are always He has 18 years of diverse global So why have the FANGs continued to do investment experience and a regulated and the value ascribed to these so well? It’s simply human nature to assume distinctly contrarian investment that what has worked in the past will keep companies may now look less certain. philosophy. He and his team take on working forever (and what has languished The public may also become disenchanted a highly active, differentiated will continue to underperform). So, to a certain with social media as they become less willing approach to investment. to share their data. Ironically, the hashtag extent, the FANGs’ strong performance has Alasdair has an MA (Hons) in #deletefacebook is now trending on Twitter. created its own momentum. And there’s also Economic & Social History from a powerful fear of missing out: witness the An exodus of advertisers is another risk. We the University of Edinburgh and rise and fall of Bitcoin. have already seen Mozilla pulling its ads from an MSc in Investment Analysis (with Facebook following the Cambridge Analytica distinction) from Stirling University. revelations. Advertisers are worried about risks He is a CFA® charterholder and “The dangers facing to their brands from association with the parent an Associate of the UK Society companies and some are increasingly sceptical of Investment Professionals. businesses beloved by of pay-per-click business models. Some of these threats may prove to be the market can be just transient. But as contrarians, we like to be thoroughly aware of potential risks when as underappreciated as considering an investment. The dangers facing the opportunities for businesses beloved by the market can be just as underappreciated as the opportunities for companies that are companies that are out of favour. out of favour.” Interested to learn more about the fund? Visit www.thescottish.co.uk or follow us on @ScotInvTrust A top-down factor has been at work too. the-scottish-investment-trust-plc Since the 2008 crisis, quantitative easing has resulted in a huge amount of money sloshing around the financial system. This has prompted Important information: Please remember that investors to pile into tech-related investments in past performance may not be repeated and is not the hope that some will be long-term winners. a guide for future performance. The value of shares and the income from them can go down as well as Some of this speculation has been remarkably For regular updates, opinions up as a result of market and currency fluctuations. ill founded – as the recent Theranos scandal and contrarian thoughts, visit You may not get back the amount you invest. shows. Led by a charismatic and youthful us at www.thescottish.co.uk founder the promise of a revolutionary new The Scottish Investment Trust PLC has a long-term technology fell flat when it was discovered that policy of borrowing money to invest in equities in scientific doubts, which had previously been the expectation that this will improve returns for ignored, were indeed well founded. shareholders. However, should markets fall these This article is issued and So far, the FANGs have benefited from borrowings would magnify any losses on these approved by SIT Savings Ltd, operating in largely unregulated territory but investments. Investment Trusts are listed companies registered in Scotland No: nothing escapes regulatory attention indefinitely. and are not authorised or regulated by the SC91859. Registered office: We think investors have underappreciated Financial Conduct Authority. 6 Albyn Place, this risk. Today, regulation of online media Please note that SIT Savings Ltd is not authorised Edinburgh EH2 4NL. is very much on the political radar. There is to provide advice to individual investors and T: 0131 225 7781 a concerted effort to reduce the power of nothing in this promotion should be considered E: [email protected] ‘big tech’, whether through stricter privacy to be or relied upon as constituting investment W: www.thescottish.co.uk regulations or tougher tax regimes. advice. If you are unsure about the suitability of The consequences could range from an investment, you should contact your financial This is a financial promotion disrupted business models to jaw-dropping advisor. This promotion is issued and approved from SIT Savings Ltd. fines. Because of the Cambridge Analytica by SIT Savings Limited, authorised and regulated debacle, Facebook is facing investigation by by the Financial Conduct Authority.

Taking Stock alliancetrustsavings.co.uk | 7 IN SEARCH OF SAFETY?

Earlier this year many investors flocked arkets feel more nervous now than they did in 2017. They were rocked by to ‘safety’ as the prospect of a trade war M the recent US imposition of tariffs on China and by the latter’s retaliation,2 amid fears and tensions over Syria triggered a wave around the implications for global growth and 1 economic stability. of unrest. Alliance Trust Savings’ Sara In the UK and Europe, Brexit is an obvious source of uncertainty, while in the US there is Wilson takes a closer look and reviews tension around the ongoing probe into alleged some of the routes traditionally used collusion between Russia and the Trump 2016 campaign. There’s also the approach of mid-term for managing downside risk. elections in November that Goldman Sachs has warned represent “yet another source of policy risk and volatility” for markets.3 All of this has been interpreted by some investors, rightly or wrongly, as raising the risk of a market downturn, hence the demand for so-called ‘safe-havens’ for their money.

8 | Taking Stock alliancetrustsavings.co.uk Cash Infrastructure Sara Wilson There may be a temptation during times The long-term nature of infrastructure Head of Platform Proposition of turbulence to simply take money out of projects and the fact that they are typically Alliance Trust Savings Limited investments and put it in savings instead. But government-backed can give them a stability Sara joined Alliance Trust Savings there are still risks. That’s partly because being even during a downturn. Spending on in March 2013 as Head of Platform out of the market means you can miss out on infrastructure also tends to rise at low points Proposition, taking on responsibility the benefits of any eventual market rebound, in the market cycle, as governments often for the products and investment when some of the biggest investment gains see spending on transport networks as a choice available on the platform. can be made for those investing over the way to boost the economy and employment 5. Previously, she worked for Standard longer term. The value of savings can also be They are a classic ‘defensive’, non-cyclical Life as International Proposition eroded significantly over time by the impact investment too, due to their typically high Manager. Before moving to of inflation. There is the risk, too, that a bank barriers to entry and low price sensitivity. Scotland Sara worked for Xansa, holding your savings could fail. a technology outsourcing company. She received a BA Honours in International Business from the University of Teesside and a Post Graduate Diploma in Marketing at Napier University, Edinburgh. Gold Gilts

Gold’s status as an investment that hedges Government bonds have traditionally enjoyed Important information: This against inflation (as it’s priced in US dollars) safe-haven status as they can provide both information does not constitute and tends to perform quite differently to a regular income and a known level of investment advice or a personal equities is a big driver of demand during capital return. They can be especially popular recommendation for any periods of volatility. Some of the biggest price during an economic crisis because of their particular investment and should spikes have occurred at times of geopolitical government backing (hence strong demand not be used as the basis of tension. The escalation of diplomatic disputes even when they offer negative yields 6). any investment decision. If you between the US and Russia, triggered by are unsure, you should consult events in Syria, pushed the gold price up to But while government backing may seem a Financial Adviser before a recent high in the first half of April 4. attractive when markets are wobbling, investing. The value of your broader economic conditions mean the lure investments and any income When it comes to gold, investor demand of gilts has faded a little in recent times. For from them can go down as well isn’t necessarily for growth, but for a hedge example, the benchmark 10-year UK gilt had as up and you may get back against risk when expecting losses in other a yield of 1.49% in early April,7 but with the less than you originally invested. Past performance is not a guide parts of a portfolio. The price of gold is driven consumer prices index at 2.5% in March (a to future performance. primarily by that investment demand and 12-month low), investors in these gilts were sentiment however, meaning it can go down effectively losing money to inflation.8 This article is issued and as sharply as it goes up. It’s worth noting approved by Alliance Trust too that it doesn’t provide an income. Savings Limited. Alliance Trust Savings Limited is a subsidiary of Alliance Trust PLC and is registered in Scotland No. SC It’s possible to access the traditional ‘safe- 1. CityAM, Investors dump equity in favour of safe havens, 98767; registered office, PO havens’ investments through specialist collective 11 April 2018. Box 164, 8 West Marketgait, 2. investment funds, including some Investment Investment Week, ‘A policy mistake of gigantic proportions’, Dundee DD1 9YP; is authorised 4 April 2018. by the Prudential Regulation Trusts. But when considering a flight to safety, 3. MarketWatch, Stock market investors brace for months Authority and regulated by the remember that diversification remains as of political uncertainty, 21 April 2018. Financial Conduct Authority important as at any other time. 4. The Hindu Business Line, Gold prices rise on tensions and the Prudential Regulation The lower investment risk generally associated over Syria, 13 April 2018. Authority, firm reference with ‘safe-havens’ reduces your potential for 5. Money Observer, 16 top safe haven investments for number 116115. returns. However investing across different asset stormy markets, 27 July 2016. 6. Financial Times, Negative-yielding gilt sale signals investor This is a financial promotion classes can allow you to take advantage of them confidence in UK economic outlook, 11 July 2017. from Alliance Trust Savings while still maintaining exposure to equities in 7. Nasdaq, UK bond prices surge after Carney comments Limited. a way that still gives you the potential to gain curb rate hike bets, 20 April 2018. from any eventual recovery. 8. BBC, UK inflation falls to lowest in a year, 18 April 2018.

Taking Stock alliancetrustsavings.co.uk | 9 FINDING OPPORTUNITY IN THE CHAPTERS OF BREXIT

ince the referendum vote in 2016, the UK equity performance has diverged sharply. But although UK GDP market has been battered by a strong Brexit doom growth may lag that of many countries, it is positive, and S and gloom theme, with uncertainty undermining the Office of Budget Responsibility has recently raised its confidence in the UK economy, in British companies forecasts for 2018 to 1.5%, and expects GDP to continue and, initially, in sterling. Within this broad narrative a growing close to this level beyond 2022. number of sub-plots are at play: here I have focused Looking at domestic stocks versus a basket of UK on three that are driving and distorting UK markets – exporters underlines just how much they have been punished and why I believe each has created opportunities. by the perception of impending Brexit-induced recession. Post-referendum, domestic stock prices plunged sharply and “UK domestic stocks are doomed” have continued to grind down. A recent uptick suggests a reappraisal of this market divergence might be underway. A prevailing macroeconomic theme suggests that export- This could gather pace if a sensible Brexit deal is reached. led companies or those with a high percentage of At current valuations, some of these domestic stocks revenues generated overseas will cope best post-Brexit. may offer both opportunity and some mitigation against a Over the past 18 months I have reduced and exited some swing in sterling. Exporters, or overseas earners, benefited long-held companies with international earnings in the from sterling devaluation, but many are now vulnerable portfolios I manage, largely for valuation reasons. Now as the performance of sterling to the US dollar has largely within my portfolios, over 50% of earnings are sterling reversed. In January, for example, British multinational denominated. Why? Diageo downgraded its sales growth forecasts for the Historically, the performance of domestically focused UK coming year, citing the pound’s strength. Some export- stocks against the wider market (as represented by GDP led companies may also be susceptible to the threat of growth) are quite closely correlated, but since mid-2016 international tariff skirmishes.

10 | Taking Stock alliancetrustsavings.co.uk “London property prices due a tumble” Notwithstanding the ongoing structural challenges Mark Barnett from online retail, Next’s online Directory and Head of UK Equities Financials is my strongest overweight position, logistics infrastructure equip the business in my Invesco Perpetual representing c35% of my holdings within each of view to navigate the shift to online better than its the Edinburgh Investment Trust plc and Perpetual rivals, reinforced by increasingly confident recent Income and Growth Investment Trust plc, compared updates from the company. Mark is responsible for the with c27% for the FTSE All-Share Index. I don’t hold management of a number of UK equity portfolios, with a focus on any banking stocks, preferring sub-sectors such Conclusion the management of open and as insurance, financial services companies and closed ended vehicles. real estate investment trusts (REITs). The latter have Shrewd investors buy companies, not stories. My been affected by the Brexit storyline that London responses to each of these chapters in the Brexit Mark began his investment career story helps illuminate my approach to managing with Mercury Asset Management is set to lose its allure as one of the world’s great in 1992. Mark joined our company portfolios. I use rigorous bottom-up research financial centres. A corollary of this is that much in 1996. Since then, he has become of the international wealth that has flowed into to identify businesses I believe are capable of one of the team’s most experienced London’s premium commercial and residential delivering a growing dividend stream into the fund managers, specialising in UK property markets is set to exit, fuelling price falls future. Regular engagement with companies’ equity income investing. that will permeate the whole market. The promised management often highlights contrarian opportunities, where the experience of a business He graduated in French and Politics recession will also affect regional shopping centres from Reading University in 1992 runs counter to macroeconomic narratives. and the office market countrywide. I believe both and has passed the associate Exploiting these opportunities means these anxieties have been exaggerated. examinations of the Association sometimes I look out of step with my peers and The discount to net asset value (NAV) has for Investment Management and may underperform in the short term, but I believe widened significantly in the REIT sector. British Research (AIMR). this investment approach will be rewarded in Land’s share price plunged following the Brexit the long term. referendum and has struggled to recover. Yet its property portfolio, encompassing prime locations nationwide, has 97.6% occupancy, a high-quality Investment risks tenant base and an average lease length of eight The value of investments and any income will years. The company’s management has taken fluctuate (this may partly be the result of exchange advantage of the share price discount to NAV, rate fluctuations) and investors may not get back announcing over £300m of share buy-backs. the full amount invested. We have found similar opportunities in a number When making an investment in an investment of names, including Derwent London1, NewRiver trust you are buying shares in a company that For more information on REIT 1, Assura1 and Secure Income REIT 1. is listed on a stock exchange. The price of the shares will be determined by supply and demand. our products, please refer to Consequently, the share price of an investment the relevant Key Information “Amazon will kill High Street retailers” trust may be higher or lower than the underlying Document (KID), Alternative Stock prices suggest markets are also giving net asset value of the investments in its portfolio Investment Fund Managers unwarranted credence to the myth that Amazon and there can be no certainty that there will be Directive document (AIFMD) and other online retailers are suffocating their liquidity in the shares. and the latest Annual or Half- more traditional competitors. Fashion and home The Edinburgh Investment Trust plc and the Yearly Financial Reports. This product business Next 1 has been challenged by this Perpetual Income and Growth Investment Trust plc information is available on narrative in the past three years. It is also facing use derivatives for efficient portfolio management www.invescoperpetual.co.uk the ‘domestic gloom’ headwind, with investors which may result in increased volatility in the NAV. assuming it will fall prey to a plunge in discretionary The use of borrowings may increase the volatility of the NAV and may reduce returns when asset spending in the predicted UK recession. This article is issued by Invesco values fall. Next has a track record of consistently delivering Fund Managers Limited, to analyst expectations and shareholder value. 1. Held in Mark Barnett’s portfolios. Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK. Important information: Where individuals or the business have expressed opinions, they are based on Authorised and regulated by current market conditions, they may differ from those of other investment professionals and are subject the Financial Conduct Authority. to change without notice. This article is marketing material and is not intended as a recommendation to invest in any particular This is a financial promotion asset class, security or strategy. Regulatory requirements that require impartiality of investment/ from Invesco Fund Managers investment strategy recommendations are therefore not applicable nor are any prohibitions to trade Limited. before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.

Taking Stock alliancetrustsavings.co.uk | 11 VinaCapital Vietnam Opportunity Fund Miton Global Opportunities plc ADVERTORIAL ADVERTORIAL

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PROCESS PROCESSPROCESS C0 M100 Y100 K10C0 M0 Y0 K30C0 M0 Y0 K100 RGB RGB RGB Miton Global Opportunities: Vietnam is thriving. R216 G25 B33 R188 G190 B192 R0 G0 B0 Seeking embedded value n 2017, its GDP grew 6.8%, and in 2018 is expected to grow around 6.7%. Bargain hunting in the in alternative areas IForeign direct investment reached a record US$36 billion, mostly from companies looking to establish or expand manufacturing operations – investment trust sector Vietnam has quickly become the manufacturing hub of Southeast Asia. These companies are driving export growth, and in 2017 export value rose 21% to reach US$214 billion, much of that consisting of high- n order to generate returns, we believe investors will RISKS sector. MIGO’s patient investment approach allows it to tech items such as mobile phones and microchips going to the EU and Iincreasingly need to look for alternative investments, away extract the embedded value in those investment trusts that 1 UK, the US, and China. Vietnam’s aggressive efforts to integrate into from funds, which invest in company shares and bonds . Forecasts are not are trading at a lower price to the value of the underlying One such area is the investment trust sector, where there reliable indicators of assets in order to realise gains over the medium to long the global economy via free trade agreements, including the recently future returns. signed CPTPP, are reaping dividends. are an increasing number of investment opportunities term. The key driver is the fact that in the current climate, following a series of significant structural changes. The value of investors are being paid royally for accepting liquidity risk3. Investment is also creating more and better paying jobs for Vietnam’s 95 investments can The fact that we enjoy closed ended protection (investment million people, half of whom are under the age of 35. Many are moving For the moment, we remain in an environment where very fall as well as rise trusts have a fixed number of shares) is crucial in allowing from rural areas to cities – Vietnam boasts Asia’s highest urbanisation low interest rates are triggering rising asset prices through and investors may not get back the full us to fish away from the crowds. It allows us to take patient rate – to seek better incomes and opportunities for themselves and a lack of alternative options. We believe the high valuations decisions knowing that there is no risk of having to meet VOF believes that the most compelling investment opportunities are amount invested. their families. This in turn has created solid demand for new homes, on which global company shares currently trade is a direct short term redemption requests. in companies participating in Vietnam’s domestic consumption growth better education, healthcare, and financial services, and discretionary result of the very low returns available from bonds. Should Miton Global story, sectors such as consumer discretionary, education, financial 2 Opportunities plc spending, as the rapidly growing middle class, expected to reach 33 bond yields rise, stockmarkets would be undermined. To provide an idea of the scale of MIGO’s investment services, construction and materials, and infrastructure. Examples of may borrow money million people by 2030, looks to spend increased disposable income. Moving on from a period of unconventional monetary which can then be universe, there are currently over 400 investment trusts some of our key investments include Vinamilk, the country’s largest policy would be healthy in the long term, however, share used to make further listed on the London Stock Exchange with an aggregate Spurred on by strong international investor interest, private sector IPOs food and beverage company, with a US$13 billion market capitalisation; prices are likely to undergo a period of turmoil whilst investments (gearing). value of over £130 billion. Over 300 of these investment and a newly aggressive push by the Vietnamese government to privatise VietJet Air, Asia’s fastest growing low-cost airline; Hoa Phat Group, the investors adapt to the new reality. Under such a scenario, In a rising market, this trusts are currently less than £400 million in size, and offer ‘gearing’ can magnify state-owned enterprises, the benchmark VN Index rose 48% in 2017, leading steel manufacturer; and most recently, Ba Huan, the largest investors would be able to obtain measurable income exposure to a broad range of alternative asset classes from ranking it among the world’s fastest growing stock markets. And in the the gains or losses producer of pasteurised eggs and poultry, applying international from conventional sources such as bonds. They would be on your investment. the likes of property to natural resources. MIGO is therefore first few months of 2018, the stock market’s rise has continued, albeit standards of safety and hygiene to meet the higher expectations of less inclined to own “income manufacturing” trusts such able to offer significant diversification across this pool of with a bit more volatility, on the back of robust earnings growth at listed local consumers. as those which invest in aircraft leasing or infrastructure potential opportunities. companies. The total market cap for the nearly 1,500 companies listed funds. The damage to the share prices would come from With extensive investment experience in Vietnam and internationally, DEFINITIONS on Vietnam’s three exchanges is approximately US$174 billion, giving a change in demand patterns rather than from significant We expect the continued consolidation of the wider VOF’s senior leaders have developed an expansive network that gives 1 the frontier market a higher valuation than some emerging markets damage at a portfolio level. Bond – A loan investment community to precipitate further structural the fund exposure to opportunities not available to others, contributing in the form of a change for investment trusts under £250 million in size. such as Pakistan (US$97 billion). security, either to the fund’s strong results. In 2017, VOF’s share price and net asset Since 2000, those investment companies that traditionally Furthermore, there appears to be no let-up in the growth Add in low inflation, a stable currency and a government committed to issued by a UK or value/share both increased 32%. VOF also became the only Vietnam- bought investment trusts have undergone a process overseas government of alternative asset classes creating future opportunities, further reforming the economy for continued sustainable growth and focused fund to pay dividends. of consolidation. Consequently, many companies have (government bonds) or many with an income bias. This development should it is easy to see why growing numbers of international investors have company (corporate VOF’s recent promotion to the FTSE 250 Index is a testament to both merged to form vast wealth management chains. The lead to an increasing supply of future opportunities been attracted to Vietnam. bonds), which pays a the strength of our model and the tremendous opportunities available impact of this consolidation has meant that a large fixed rate of interest going forward. in Vietnam today. proportion of the investment trust sector has become over a given time How to invest in Vietnam? The VinaCapital Vietnam effectively off limits to such firms as they are unable to period, at the end of In summary, we are focused on extracting embedded Opportunity Fund cope with the huge capacity and liquidity levels required by which the initial amount value, which already exists, not trying to generate returns borrowed is repaid. Launched in 2003, the VinaCapital Vietnam Opportunity Fund (VOF) is these new mega-chains whose assets under management from trying to second guess unpredictable future share Andy Ho 2 price or market movements. We believe there is good one of the largest and most successful investment vehicles focused on number in the billions. Bond yield – The interest received scope for this latent value to be realised. We are excited Vietnam. VOF is unique from other funds in that it can invest across VinaCapital This dynamic has in effect served to ‘orphan’ hundreds from a fixed income by the opportunities and believe MIGO’s research-led asset classes, such as listed equities, private equity, and government Vietnam Opportunity Fund security and is usually of investment trusts, many of whom are now under- approach has the ability to make gains over the long- privatisations, enabling it to participate in all segments of Vietnam’s expressed annually as researched and increasingly illiquid as demand has a percentage based on term, in a significant but under exploited segment of the vibrant economy. naturally slowed, despite there being no critical issue the investment’s cost, UK market. with the trusts, assets or their overall strategies. Without its current market value or its face value. IMPORTANT INFORMATION: VinaCapital Vietnam Opportunity Fund Limited (the “Company”) is a Guernsey domiciled closed-ended investment demand, the share prices of these investment trusts have In addition to the natural defensive buffer created by owning deeply discounted assets, owning shares in MIGO company listed on the London Stock Exchange and is a member of the Association of Investment Companies. Past performance is not a guide to slowly drifted lower than the value of their underlying 3Liquidy risk – The future performance. The value of investments and the income from them may fall as well as rise and is not guaranteed. An investor may not get assets creating a significant opportunity for the diligent and risk stemming from the offers useful diversification given some of the current back the original amount invested. There can be no assurance that the Company’s investment objective will be achieved and investment results specialist investor to buy. lack of marketability themes. Specific opportunities in the Indian stockmarket, may vary substantially over me. This document is for information purposes only and does not constitute an offer or invitation to purchase shares of an investment that residential property in Berlin and Forestry all feature Miton Global Opportunities Trust plc (MIGO) is, we believe, cannot be bought or prominently in the portfolio. Miton does not give investment in the Company and has not been prepared in connection with any such offer or invitation. Investment Trust share prices may not fully reflect sold quickly enough underlying net asset values. a unique investment proposition that specifically seeks to to prevent or minimize advice, so if you are unsure of the suitability of this There may be a divergence between the prices at which you may purchase (“the offer price”) or sell (“the bid price”) a share on the stock market exploit opportunities in this part of the investment trust a loss. investment you should speak to a financial adviser. which is known as “bid-offer” or “dealing “spread”. This is set by the market makers and varies from share to share. This spread typically averages 1-2% each way on the mid-market price (the price halfway between the bid and offer prices), and can fluctuate and at times be higher than average. Net Asset Value per share is calculated in accordance with the guidelines of the Association of Investment Companies. Net assets are IMPORTANT INFORMATION stated inclusive of income received. Any opinions on individual stocks are those of the Company’s Portfolio Manager and no reliance should be The views expressed are those of the fund manager at the time of writing and are subject to change without notice. They are not necessarily the views of Miton and do not constitute investment advice. given on any such views. Any research in this document has been procured and may have been acted upon by VinaCapital Investment Management Miton has used all reasonable efforts to ensure the accuracy of the information contained in the communication, however some information and statistical data has been obtained from external sources. Ltd for its own purposes. The results are being made available to you only incidentally. The views expressed herein do not constitute investment Whilst Miton believes these sources to be reliable, Miton cannot guarantee the reliability, completeness or accuracy of the content or provide a warrantee. or any other advice and are subject to change. They do not necessarily reflect the views of VinaCapital Investment Management Ltd and no assurances are made as to their accuracy. This is distributed by Frostrow Capital LLP on behalf of VinaCapital Investment Management Ltd, the Investors should read the Trust’s product documentation before investing including, the latest Annual Report and Accounts and the Alternative Investment Fund Managers Directive (AIFMD) Disclosure investment manager of VinaCapital Vietnam Opportunity Fund Limited. Frostrow Capital LLP is authorised and regulated by the Financial Conduct Document as they contain important information regarding the trust, including charges, tax and specific risk warnings and will form the basis of any investment. Authority (“FCA”). Before investing in an investment trust referred to in this advertorial, you should satisfy yourself as to its suitability and the risks This financial promotion is issued by Miton, a trading name of Miton Trust Managers Limited. Miton Trust Managers Limited is authorised and regulated by the involved, and you may wish to consult a financial adviser. Financial Conduct Authority and is registered in England No. 220241 with its registered office at 6th Floor, Paternoster House, 65 St Paul’s Churchyard, London, EC4M 8AB. MFP 18/01.

12 | Taking Stock alliancetrustsavings.co.uk

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Taking Stock alliancetrustsavings.co.uk | 13

145XX Advertorial MoneyWeek_Vietnam Opportunity Fund_V2.indd 1 29/03/2018 17:29 STILL FINDING WINNERS IN THE UK

There have been so many ‘speed bumps’ threatening istoric as recent events may seem, with to impact the global economy over the last couple time their significance may fade. As H Manager of The Merchants Trust, I am of years, it’s easy to assume that unprecedented, investing mainly in higher-yielding large UK companies, so I’m often asked about my views fundamental change in the world economic order on Brexit and its current and eventual impact may be inevitable. Certainly, for the last year or so we on the UK economy and stock market. I don’t have concrete answers, of course, but the risk have been in unchartered – and potentially choppier – profile for the UK economy has clearly risen and waters, with various global developments threatening the current political and economic uncertainty is challenging. Although the UK stock market had to ‘rock the boat’. Torturous Brexit negotiations, a decent 2017, UK shares lagged those of other dramatic elections across Europe, the first full year global markets. And 2018 has been tricky so far. Politics and Brexit have been concerning of the Trump presidency (and the politically divisive potential investors. Global exposure to UK implications of the ‘America First’ policy) come to equities has been falling as investors have been taking their money out of the UK and investing mind immediately, but there are many more. But it elsewhere. Yet, corporate buyers seem to have do seemingly momentous events like these really ignored the doom and gloom and have been targeting UK companies. We have seen several signify a fundamental economic turning point or takeover approaches or full bids for UK mid-cap rather just the latest chapter in an ongoing story? companies in the last few months. Corporate appetite for ‘UK PLC’ backs up our own view that the UK stock market is one of the cheapest markets in the developed world right now with many domestically exposed sectors trading on

14 | Taking Stock alliancetrustsavings.co.uk “Corporate appetite which many consider to be the worst financial Simon Gergel crisis since the Great Depression of the 1930s. I’ve Portfolio Manager for ‘UK PLC’ backs up been running The Merchants Trust for 12 years but The Merchants Trust PLC the Trust itself was established in the 19th century our own view that the and will celebrate its 130th birthday next year. Not Simon Gergel is CIO of UK Equities UK stock market is one only has it survived global conflicts and crises, but at Allianz Global Investors and is its resilience through markedly different market portfolio manager of The Merchants of the cheapest markets conditions has enabled it to generate notable Trust PLC. Merchants has for many long-term returns for its investors. I’m sure there years focused on a simple in the developed must have been many a time along the way when proposition to deliver a high and investors felt they too were embarking on an era rising income together with capital world right now.” growth for its shareholders. Although of fundamental change. past performance is no guide to the The UK economy may be under a cloud future, Merchants has paid a rising right now but, as well as domestically focused low valuations due to concerns about Brexit, dividend to shareholders for 36 businesses, the UK is home to some of the world’s political risk or structural factors. For corporate consecutive years. largest and best known “mega cap” businesses so buyers willing to look longer term, these valuations can represent rare opportunities to investing in UK stocks can still provide access to buy sound businesses at bargain prices. the global economy. These companies choose to This is a marketing Many domestically exposed stocks have been call the UK ‘home’ because, structurally, we have communication issued by feeling the pain, partly because of concerns that some of the highest standards of stewardship and Allianz Global Investors the nature of post-Brexit trading arrangements corporate governance anywhere in the world. GmbH, an investment may cause the domestic economy to slow down. And for those UK stocks that are truly domestically company with limited liability, Although we take account of macro-economic focused (i.e. deriving most of their revenues from incorporated in Germany, trends, our focus is on the fundamental qualities within the UK and where clouds have gathered with its registered office at of individual businesses and we have been since the June 2016 EU referendum result) there Bockenheimer Landstrasse able to unearth sound companies in out-of- will still be long-term winners, even though they 42-44, D 60323 Frankfurt/M, favour sectors. The Trust’s portfolio has a high may be almost universally lowly valued today. registered with the local court exposure to modestly rated companies and their Looking ahead, the outlook is tough to call. Frankfurt/M under HRB 9340, authorised by Bundesanstalt für underperformance over recent months has made Losing access to the EU’s free trade area may Finanzdienstleistungsaufsicht this a fertile investment area for us. be an economic negative but it will give the UK (www. bafin.de). Allianz Differentiation is crucial. As a stock picker I the opportunity to change the way it trades with Global Investors GmbH has would say there are lots of opportunities out there the rest of the world, potentially for the better. established a branch in the right now. You must do your homework, of course, I’m certainly not ready to write off the long- United Kingdom, Allianz Global analysing and understanding the specific issues term prospects for the UK economy and, in the Investors GmbH, UK branch, that could affect specific companies. However, in meantime, my focus remains on strong franchises which is subject to limited many cases, Brexit may not play out to be such with distinct businesses models – companies that regulation by the Financial a big issue although the knock-on effect on the have a good chance to do well, even if the short- Conduct Authority (www.fca. economy overall is something we will always term environment is uncertain. org.uk). This communication need to bear in mind. has not been prepared In uncertain times it can be helpful to look back. To find out more about Simon’s investment in accordance with legal During my career there have been some incredibly philosophy and stock selection process, view requirements designed to ensure tough times, like the 1987 crash and, more the latest Merchants annual report which is the impartiality of investment recently, the 2008 bear market and recession, available at www.merchantstrust.co.uk. (strategy) recommendations and is not subject to any prohibition on dealing before publication Important information: This is no recommendation or solicitation to buy or sell any particular security. of such recommendations. Any security mentioned above will not necessarily be comprised in the portfolio by the time this document The Merchants Trust PLC is is disclosed or at any other subsequent date. Investing involves risk. The value of an investment and the incorporated in England and income from it may fall as well as rise and investors may not get back the full amount invested. The views Wales (Company registration no. and opinions expressed herein, which are subject to change without notice, are those of the issuer and/ 28276). Registered Office: 199 or its affiliated companies at the time of publication. The data used is derived from various sources, Bishopsgate, London, EC3M 3TY. and assumed to be correct and reliable, but it has not been independently verified; its accuracy or This is a financial promotion completeness is not guaranteed and no liability is assumed for any direct or consequential losses arising from Allianz Global Investors. from its use, unless caused by gross negligence or wilful misconduct. The conditions of any underlying offer or contract that may have been or will be made or concluded shall prevail.

Taking Stock alliancetrustsavings.co.uk | 15 QUALITY CONTROL: A re-evaluation of risk

– Loose monetary policy has allowed investors to take risk with little fear for the consequences – The shift in the monetary policy environment is likely to change this, exposing companies with high debt and weaker business models – In this new environment, investors will have to ensure that companies are genuinely resilient

or the best part of a decade, investors haven’t since the start of the year is testament to how benign had to worry too much about risk. Loose monetary conditions have been. The Vix index of volatility 2 has only hit F policy helped float all boats: Taking risk paid off the level seen throughout much of 2012-2014 and is less for investors, with little downside in the form of higher than a third of its level during the financial crisis. This is not volatility. As the environment changes, however, this significant volatility by historic standards. It only feels benign environment may not endure and risk could painful because investors have become so unused to it. become real rather than theoretical. For a period of time in the wake of the global financial crisis, investors sought reliability above all. While this Quantitative easing and low interest rates sprinkled their sometimes led them to quality companies, it made them magic on companies. Like champagne cascading down agnostic on valuations and indifferent and the earnings a tower of glasses, eventually it reached the bottom of the picture for some of those companies weakened. They heap. Investors didn’t need to pay too much attention to weren’t seeking ‘quality’ so much as historic stability – metrics such as corporate balance sheets or higher leverage and, as we know, past performance is no guide. because loose monetary policy bailed them out. Companies This environment may be about to change, as we move that were weak and indebted could generally refinance at from a falling interest rate environment to one where rates lower rates. Companies that would have gone bust, or are rising. It should be said that for the time being, the US the been forced to restructure, were supported. only major market in a rising cycle. However, outstanding US government debt is around twice as high as that of its nearest Recently, Claudio Borio, head of the Monetary and rival (Japan) so its position is important 3. Equally, it would Economic Department of the Bank for International only take one or two of the world’s major central banks – the Settlementsraised concerns about the tendency of low 1 UK, Japan or Eurozone – to shift its position for over half of interest rates to sustain ‘zombie companies’ . global bond markets to be in tightening mode. This would He defined these as older companies, unable to service be mark a major change in the risk environment. their debts under normal circumstances. In a standard cycle, As Warren Buffett famously said, it is only when the they would have been gone bust or been taken over and tide is going out, that you see who is swimming naked. new, better companies would have emerged to fill the void. As liquidity conditions tighten, weaker companies may There is now a whole generation of investors who have find themselves starved of capital as investors become never seen an interest rate rising cycle, or even a recession. more discerning, more indebted companies may find their Volatility has been so low for so long, that it appears to debt burden increases and they can no longer sustain their have skewed investor perception of what constitutes normal business model. Suddenly ‘quality’ matters a great deal market volatility. The furore around the turbulent markets more than it did before.

16 | Taking Stock alliancetrustsavings.co.uk QUALITY CONTROL:

A secondary risk, but Risk warnings Bruce Stout one that shouldn’t be Senior Investment Manager ignored, is that of • The value of investments and the income from them can fall and investors may Murray Income Trust PLC recession. The global get back less than the amount invested. economy has been in Bruce Stout is a senior investment expansion mode for • Past performance is not a guide to manager on the Global equities some time, and this year future results. team. Bruce joined Aberdeen no major economy is • Investment in the Company may not be in 1987 via the acquisition of forecast to be in recession. appropriate for investors who plan to Murray Johnstone. Bruce has held a number of roles including This can create an illusion withdraw their money within 5 years. of invincibility. Investors investment manager on the emerging markets team. are often seduced by rising • The Company may borrow to finance prices to believe that risk has further investment (gearing). The use of Bruce graduated with a BA in gearing is likely to lead to volatility in the Economics from the University diminished. While recession is Net Asset Value (NAV) meaning that any of Strathclyde and completed a not our central position, it remains a movement in the value of the company’s graduate training course with possibility and the flattening of the US yield assets will result in a magnified movement General Electric Company UK. curve – typically an auger of recession – should in the NAV. give investors pause for thought. Companies can – and do – go bust. The • The Company may accumulate investment difficulties experienced by, variously, UK high positions which represent more than street retailers, and government outsourcing normal trading volumes which may make companies, or European airlines shows that it difficult to realise investments and may lead to volatility in the market price of the even large companies can be laid low by Company’s shares. changing market conditions, excessive debt or poor management. A less benign monetary • The Company may charge expenses to environment will expose these weaknesses. capital which may erode the capital Find out more at In this context investors need ‘wiggle room’, value of the investment. www.murray-intl.co.uk a margin of safety. They need to ensure that • Movements in exchange rates will impact companies are genuinely delivering high and on both the level of income received and sustainable earnings rather than trading on past the capital value of your investment. This article is issued by success. Those who can truly claim the stamp Aberdeen Asset Managers of ‘quality’ need to be able to back that up with • There is no guarantee that the market Limited which is authorised real business strength, thoughtful management price of the Company’s shares will fully and regulated by the Financial reflect their underlying Net Asset Value. and attentiveness to shareholder value. A lot Conduct Authority in the United Kingdom. of traditionally defensive companies look over- • As with all stock exchange investments the valued, without the earnings to sustain their value of the Company’s shares purchased Aberdeen Standard Investments current share prices. Investors need to tread will immediately fall by the difference is a brand of the investment carefully in this environment. between the buying and selling prices, the businesses of Aberdeen Asset Management and Standard Within the Murray International Trust, we bid-offer spread. If trading volumes fall, Life Investments. aim to direct capital to those parts of the world the bid-offer spread can widen. Registered Office: 10 Queen’s experiencing real growth. Almost a quarter of • Yields are estimated figures and may Terrace, Aberdeen AB10 1YG. our portfolio is in the Asia Pacific ex Japan fluctuate, there are no guarantees that Registered in Scotland No. region, with Latin America and other emerging future dividends will match or exceed 108419. An investment trust markets making up a further 17%. We believe historic dividends and certain investors should be considered only as may be subject to further tax on dividends. that fundamentals look increasingly fragile part of a balanced portfolio. in some areas, particularly within developed • The Company invests in emerging markets Under no circumstances should markets, and the companies in which we invest which tend to be more volatile than mature this information be considered need to be genuinely and demonstrably resilient. markets and the value of your investment as an offer or solicitation to At this inflection point, we are making sure that could move sharply up or down. deal in investments. ‘quality’ means exactly that. Tax treatment depends on the individual This is a financial promotion 1. www.ft.com/content/40c44992-17c3-11e8-9376- circumstances of each investor and may be from Aberdeen Asset 4a6390addb44 subject to change in the future. You should Managers Limited. 2. https://finance.yahoo.com/quote/%5EVIX/ obtain specific professional advice before 3. www.bis.org/statistics/bulletin1803.pdf, p194 making any investment decision.

Taking Stock alliancetrustsavings.co.uk | 17 APPETITE FOR DISRUPTION: How new technology is driving dividends

Tony DeSpirito apital at risk: All financial investments The technology sector in particular has the Portfolio Manager involve an element of risk. Therefore, potential to deliver income. Many innovative start- BlackRock North American Cthe value of your investment and ups offer new and exciting technologies, but Income Trust plc any income from it will vary and your initial well-established IT companies are benefiting investment amount cannot be guaranteed. too, as organisations look to upgrade their Tony DeSpirito is co-manager of the As much of the developed world looks forward to systems and processes. We’re also finding that BlackRock North American Income longer life expectancy (The Lancet, February 2017), an increasing number of technology firms use Trust plc. He is co-lead of the Equity we anticipate that the ageing populations in the cash to pay dividends, contrary to the notion Dividend Team and Director of that IT firms can add value to investors only Investments, US Equities within the US, Europe and Japan will prioritise income in their via their growth potential. We believe this trend Fundamental Active investment portfolios. Yet traditional avenues are will continue, as shareholders are increasingly Equity business of BlackRock’s becoming less attractive or easy to find. willing to reward mature IT companies’ Active Equity Group. Prior to joining An alternative source can potentially be BlackRock in 2014, Tony worked found in the US stock markets; more specifically, management teams for dividend payments. at Pzena Investment Management in companies that pay regular dividends to The opinions expressed are as of May 2018 where he was Managing Principal, shareholders. We believe that companies and are subject to change at any time due to portfolio manager, and a member responding positively to disruptive technologies – changes in market or economic conditions. of the firm’s Executive Committee. and upsetting traditional business models The above descriptions are meant to be Tony earned a BS degree, summa in the process – may prove significant as illustrative. There is no guarantee that any cum laude, from the Wharton dividend payers. School of the University of forecasts made will come to pass. Pennsylvania in 1990 and a JD Please remember that capital growth values degree, magna cum laude, from may fluctuate and the level of income may Risks Harvard Law School in 1993. vary and is not guaranteed. Investing in shares that potentially deliver Please note you may not get back the amount consistent dividend growth, as well as regular originally invested. Changes in the rates of dividend payments, can offer investors the exchange between currencies may cause the value opportunity for long-term capital growth. A of investments to diminish or increase. Fluctuation look at the S&P 500 from 1940-2017 reveals may be particularly marked in the case of a higher that dividend reinvestment and the effects of volatility fund and the value of an investment may compounding (receiving interest on your interest) fall suddenly and substantially. Levels and basis accounted for more than 40% of the index’s of taxation may change from time to time. returns (Morningstar. Data from 1/1/1940 to 12/31/2017). For more information on the opportunities There is no guarantee that a positive that North America represents, please visit investment outcome will be achieved. www.blackrock.com/uk/brna. This article is issued and approved by BlackRock Important information: Non-mainstream pooled investment products status. Investment Management The Company currently conducts its affairs so that its securities can be recommended by Independent (UK) Limited (authorised and Financial Advisers to ordinary retail investors in accordance with the Financial Conduct Authority (FCA) rules regulated by the Financial in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future. Conduct Authority). Registered The securities are excluded from the FCA’s restrictions which apply to non-mainstream investment products office: 12 Throgmorton because they are shares in an investment trust. Avenue, London, EC2N 2DL. Any research in this document has been procured and may have been acted on by BlackRock for its own Registered in England No. purpose. The results of such research are being made available only incidentally. The views expressed do not 2020394. Tel: 020 7743 3000. constitute investment or any other advice and are subject to change. They do not necessarily reflect the views For your protection, telephone of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy. calls are usually recorded. The Company is managed by BlackRock Fund Managers Limited (BFM) as the AIFM. BFM has delegated BlackRock is a trading name certain investment management and other ancillary services to BlackRock Investment Management (UK) of BlackRock Investment Limited. The Company’s shares are traded on the London Stock Exchange and dealing may only be through Management (UK) Limited. a member of the Exchange. The Company will not invest more than 15% of its gross assets in other listed investment trusts. SEDOL™ is a trademark of the London Stock Exchange plc and is used under licence. This is a financial promotion from BlackRock Investment © 2018 BlackRock, Inc. All Rights reserved. BlackRock, BlackRock Solutions, iShares, Build on BlackRock, Management. So What Do I Do With My Money and the stylized i logo are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners. ID: 489818.

18 | Taking Stock alliancetrustsavings.co.uk Success in investment doesn’t come easily.

APPETITE FOR It takes skill. Conviction. DISRUPTION: The determination to focus on your goals. Whatever the conditions. And the experience to ﬁ nd a new route when challenges arise. As a unique investment trust, we think differently. Like our ﬁ rst-ever clients, 130 years ago. Those pioneers se ing out on the Old Oregon Trail.

Today, we’re pioneering a new investment style. A high-conviction, multi-manager approach. Delivered by eight of the world’s leading equity managers. Discovering the best opportunities. And selecting only their best investment ideas. Navigating risk and seeking out growth potential. Helping investors like you aim higher with their savings.

Investing for today. Tomorrow. And generations to come.

When investing, your capital is at risk. The value of your investment may rise or fall as a result of market ﬂ uctuations and you might get back less than you invested.

To ﬁ nd out more and take advantage of this opportunity, visit alliancetrustsavings.co.uk/alliance-trust or speak to your adviser.

Alliance Trust PLC is listed on the London Stock Exchange and is registered in Scotland No SC1731. Registered ofﬁ ce, 8 West Marketgait, Dundee DD1 1QN. Alliance Trust PLC gives no ﬁ nancial or investment advice.

Taking Stock alliancetrustsavings.co.uk | 19 MONKS: GROWTH FROM DIFFERENT PERSPECTIVES

he managers seek to create a differentiated, actively Charles Plowden, Malcolm MacColl managed global equity portfolio containing a diversified T range of growth stocks. Recognising that growth comes in and Spencer Adair have been many shapes and sizes, they have identified four sub-categories of growth that they believe will generate sustainable growth and managing Monks Investment Trust hopefully lead to the trust’s outperformance over the long term. since April 2015. But this triumvirate When analysing businesses, the managers focus on their underlying growth attributes and do not allow themselves to be have been working together since distracted by the traditional habit of labelling companies by sector 2005 on Global Alpha, Baillie Gifford’s or domicile. For them, it is ridiculous to think that the location of a company’s headquarters matters in this globalised world, or that all largest institutional strategy with over financial or technology stocks share common business characteristics. £30 billion invested. Monks sets out Monks categorises its investments into four growth categories: Growth Stalwarts, Rapid Growth, Cyclical Growth and Latent to be a core global growth investment Growth. The team has a clear view of the inefficiencies they are and could act as a cornerstone to exploiting within each growth category and the reasons why they expect investments to outperform. The use of these four designations private investors’ portfolios. also encourages diversity across the portfolio and provides a means of monitoring the operational performance of the investments.

1. Growth Stalwarts These companies have durable franchises. They are expected to deliver robust profitability in most macroeconomic environments. Within this area, the managers are often drawn to businesses where the competitive advantages include dominant local scale, customer loyalty and strong brands. An example of one such stock held in

20 | Taking Stock alliancetrustsavings.co.uk 3. Cyclical Growth James Budden Monks Annual Past Performance Director, Marketing To 31 March each year (%) Companies in this category will have material secular growth prospects, but will also be subject to and Distribution the influence of macroeconomic or capital cycles, Baillie Gifford 2014 2015 2016 2017 2018 and sometimes both. Here the managers look for 12.2 10.6 -3.2 53.9 20.3 businesses which are adaptable, with management James graduated MA in Classics from the University of Cambridge Source: Morningstar. Share price, total return. teams trusted to allocate capital skilfully. Typically, the earnings of these businesses are expected to in 1987. He joined Baillie Gifford Past performance is not a guide to future returns. increase 10–15% per annum over the course of a in 2008 having worked at Witan complete cycle. Orica would be a good example Investment Trust and Henderson Global Investors. James is a Director from the current portfolio. This company provides of Marketing and Distribution in the portfolio would be Thermo Fisher Scientific, services to the mining industry. In particular Orica the Clients Department. the medical equipment, software and services is the global leader in commercial explosives and company. In healthcare terms it is akin to those blasting technologies. Its business is set to pick up firms who sold picks and shovels to miners during as the mining industry recovers, offering a potential the gold rush. It enjoys high customer loyalty and opportunity for significant margin improvement. has the potential for strong structural growth. We would hope Stalwarts to produce earnings and 4. Latent Growth cash flow per share growth of around 10% per annum over the long run. These are the types of These are firms with often unspectacular recent long-duration businesses where the market fails operational records. The market expects them to appreciate the benefits of compounding, as to either shrink or produce very low growth. they may appear unexciting relative to more However, analysis has identified a company- rapid or cyclical growth companies. specific catalyst or series of catalysts, which will allow above average earnings and cash flow growth to re-emerge. The Monks managers 2. Rapid Growth expect to make money in these stocks if the Most frequently, these are earlier stage businesses market’s expectations for earnings growth are where the market opportunity is vast. Investments upgraded and higher valuation multiples are in this area might expect to deliver high levels attached to the profit stream. Fiat Chrysler of revenue growth (at double digit per annum Automobiles fits into this category. Through a rates), and profit growth of 15–25%+ per series of bold purchases (including Chrysler annum on a five year view. Commonly, these are and Jeep) the management of Fiat have set companies which are innovative, some attacking about rejuvenating tired brands and dispelling existing industry profit pools and some creating poor market perceptions about their products. new markets for themselves. The AIA Group, In essence Monks offers a diverse and measured which is one of pan-Asia’s largest insurance and take on global growth. The managers like a flat investment groups, is a typical Rapid Growth portfolio with around 110 stocks sized according company. It is capitalising on Asia’s expanding to enthusiasm. They invest with an eye to valuation middle class tackling a huge and as yet unmet levels. It is a trust that can sit comfortably at the need for basic financial products. centre of anyone’s portfolio.

Important information and risk warnings: The views expressed in this article should not be considered as advice or a recommendation to buy, sell or hold a particular investment. Some of the views expressed are not necessarily those of Baillie Gifford. Investment markets and conditions can This article is issued by change rapidly, therefore the views expressed should not be taken as statements of fact nor should Baillie Gifford & Co Limited reliance be placed on them when making investment decisions. This article contains information on and does not in any way investments which does not constitute independent investment research. Accordingly, it is not subject constitute investment advice. to the protections afforded to independent research and Baillie Gifford and its staff may have dealt All information is sourced from in the investments concerned. Please remember that the value of a stock market investment and Baillie Gifford & Co and is any income from it can fall as well as rise and investors may not get back the amount invested. current unless otherwise stated. Investments with exposure to overseas securities can be affected by changing stock market conditions and currency exchange rates. The trust invests in emerging markets where difficulties in dealing, This is a financial promotion settlement and custody could arise, resulting in a negative impact on the value of your investment. from Baillie Gifford & Co Baillie Gifford & Co and Baillie Gifford & Co Limited are authorised and regulated by the Financial Limited. Conduct Authority (FCA). The investment trusts managed by Baillie Gifford & Co Limited are listed UK companies and are not authorised and regulated by the Financial Conduct Authority.

Taking Stock alliancetrustsavings.co.uk | 21 BRUNNER: THE SEARCH FOR FUTURE WINNERS AHEAD OF THE CROWD

We understand why investors may be hesitant Longevity and long-term conviction are two attributes about investing right now. Stock markets have been rising (more or less) steadily over recent that Investment Trusts have demonstrated over 150 years, despite the unsettling political landscape. years. As Portfolio Manager of The Brunner Investment With market valuations high, a market correction is a risk. But global political events have so far Trust (and an investor in Investment Trusts myself), failed to dent equity markets to any significant I know that investors considering future investment degree because the underlying economic data has remained so robust. Capital gains decisions find it reassuring to look back in time at have been stronger than we expected, with their history, since these are amongst the very oldest the possible exception of the UK, where the political uncertainty since the Brexit vote has forms of investment vehicle. triggered some sluggish and uncertain growth; nevertheless, UK markets have still made positive progress year-on-year and it has been possible to identify UK stock winners. stablished in 1927, Brunner has Our priority for Brunner is to build a global demonstrated not only longevity over its equity portfolio of around 70 strongly financed E 91 years but also an ability to deliver long- companies with good growth prospects that term income and growth returns in a sustained are trading on sensible valuations. I’ve always manner. It is not alone in successfully navigating run relatively concentrated portfolios and I am the variety of market conditions that history has comfortable with that approach as I think it thrown at it. However, now that we find ourselves concentrates the mind. You really must make sure in such a fast-moving world characterised by you’re choosing the right stocks but it also means fundamental change, a look back at the Trust’s that you can have decent weightings in the stocks long and distinguished history can be both that you go on to buy. As Brunner’s objective educational and reassuring. is to deliver growth in both capital value and

22 | Taking Stock alliancetrustsavings.co.uk dividends, the companies we choose need to the banks, pharmaceuticals, energy companies, Lucy Macdonald meet certain criteria. As a team, we prefer for example. It was time to diversify and Portfolio Manager give exposure to interesting sources of yield companies in growing industries that can grow The Brunner Investment Trust PLC through their own innovation. We believe these overseas. The UK is still important but it’s worth remembering that the vast majority of our UK are the sorts of companies that will allocate Lucy Macdonald is CIO of Global surplus capital well and invest wisely in both investments are international businesses, meaning Equities at Allianz Global Investors business and management. But, we also need that our overall exposure to the domestic UK and is portfolio manager of The companies that can provide a decent yield, to economy remains modest. Brunner Investment Trust PLC. keep a core part of the dividend coming through. Politically and economically, we are living in Brunner aims to provide its investors This balance is something we have achieved over unprecedented times. But, as a ‘bottom-up’-driven with growing dividends and capital time – Brunner has increased its dividend for 46 fund manager, we are confident that our stock growth by investing in a portfolio consecutive years, something that’s very important selection can cope with momentary unrest in the of global equities. Although past to our investors and a source of pride for us. markets. Right now, technology is a sector where performance is no guide to the we think we can find stocks with structural growth future, Brunner has paid a rising dividend to shareholders for 46 potential. Digitisation is having a massive impact consecutive years. “I’ve always run relatively on industry and commerce and we are all familiar with the digital heavyweights that have become concentrated portfolios part of our daily lives. The Digital Economy phenomenon goes This is a marketing and I am comfortable with well beyond the ‘new’ digital players as it also communication issued by Allianz Global Investors that approach as I think encompasses the shift of existing businesses online, with all the cost, business model and GmbH, an investment company with limited liability, cultural disruption this entails. Excitingly, this it concentrates the mind.” incorporated in Germany, transformation of the corporate sector is still with its registered office at at a relatively early stage. We think the ability Bockenheimer Landstrasse The last year was a strong one for Brunner. to embrace digital technology and to train 42-44, D 60323 Frankfurt/M, We have demonstrated that we can deliver workforces on how to use it will be pivotal to registered with the local court strong overall returns in a range of market future corporate success stories. Frankfurt/M under HRB 9340, environments. It’s helpful that, since we focus Cloud computing, social networking, online authorised by Bundesanstalt für on companies, the Brunner portfolio is diversified travel and gaming are all represented in the Finanzdienstleistungsaufsicht across a wide range of sectors and geographies, Brunner portfolio. And looking ahead, as many (www. bafin.de). Allianz Global without being overly exposed to any one theme industries continue the shift online, we think it Investors GmbH has established or sector. We always aim to discover future will be our ability to differentiate between those a branch in the United Kingdom, winners ahead of the crowd; this provides us companies that are leading, and profiting from, Allianz Global Investors with the prospect of real potential upside. the digitisation trends in their industries, while at GmbH, UK branch, which is In recent years, we have been shifting the same time avoiding the losers. This holds the subject to limited regulation by the Financial Conduct Brunner’s portfolio overseas – with the UK now key to the Trust’s future performance potential, Authority (www.fca.org.uk). This making up about 30% of the geographic portfolio but we are confident that our stock picking approach in these interesting times will continue communication has not been breakdown, down from around 45% at the end to serve our valued investors well in the future. prepared in accordance with of 2013. We felt that the income generation legal requirements designed requirement had become too dependent on the To discover more about Lucy’s investment to ensure the impartiality UK and too reliant on solid, dependable but not approach, visit www.brunner.co.uk where of investment (strategy) necessarily fast-growing companies – some of you can register for regular updates. recommendations and is not subject to any prohibition on dealing before publication of Important information: This is no recommendation or solicitation to buy or sell any particular security. such recommendations. The Any security mentioned above will not necessarily be comprised in the portfolio by the time this document Brunner Investment Trust PLC is disclosed or at any other subsequent date. Investing involves risk. The value of an investment and the is incorporated in England and income from it may fall as well as rise and investors may not get back the full amount invested. The views Wales (Company registration no. and opinions expressed herein, which are subject to change without notice, are those of the issuer and/ 226323). Registered Office: 199 or its affiliated companies at the time of publication. The data used is derived from various sources, Bishopsgate, London, EC3M 3TY. and assumed to be correct and reliable, but it has not been independently verified; its accuracy or This is a financial promotion completeness is not guaranteed and no liability is assumed for any direct or consequential losses arising from Allianz Global Investors. from its use, unless caused by gross negligence or wilful misconduct. The conditions of any underlying offer or contract that may have been or will be made or concluded shall prevail.

Taking Stock alliancetrustsavings.co.uk | 23 TIPS FOR UNCERTAIN TIMES

Are we on the cusp of a fundamental change in the world order? What might this mean for markets? No one can say for sure. Investors and uncertainty can be a volatile mix. But there are some basic tips that can help you make the most of your money whatever the future may bring. Alliance Trust Savings’ James McCafferty explains.

24 | Taking Stock alliancetrustsavings.co.uk ess than 10 years ago the banking crisis low, and fewer when they are high. In this way James McCafferty sent markets into freefall, with investors you can effectively smooth out the highs and Platform Proposition Manager selling out of equities in fear of a once-in- lows in prices over time, giving yourself the best L Alliance Trust Savings Limited a-lifetime crash. The implications for the banking chance of riding out the short-term bumps while system and the global economy seemed dire. bolstering your long-term return potential. James is Platform Proposition While in many ways we’re still paying the price Manger at Alliance Trust Savings of the crisis, investors have since had a much Tapping in to the power of compounding and has responsibility for the better time than might have been expected. Albert Einstein reportedly described compounding ongoing development of the Those who resisted the temptation to sell out as “the most powerful force in the universe” 4. platform and products. He has of stock market-related investments have been Compounding is the snowball effect that can over 15 years industry experience rewarded by a nine-year bull market 1. occur when investment income – perhaps in the gained in the Intermediary Those nine years haven’t exactly been calm Business at Cornelian Asset form of dividends or interest – is not taken out at Managers and in previous roles though. Markets have been buffeted by all manner the time, but instead reinvested so it is available with F&C and Standard Life. of events – from the fallout from the crisis and the to generate further growth. The magic of impact of the technological revolution to political compounding is that, once it starts, the potential turbulence and terrorist atrocities – and there have for growth can be multiplied over time. been sharp corrections along the way. Global Investment trusts can be especially effective indices reached new highs in 2017 and early here, thanks to their ability to set aside up to 2 2018 , underlining what can be a stark disconnect 15% of their income in reserve each year to help between economies and investment markets. maintain income payouts during leaner times. So, what can an investor do to potentially More than 20 investment trusts have provided at benefit when investing through uncertain times? least 20 consecutive years of dividend increases, Important information: This and four have raised their dividend every year information does not constitute Being patient and keeping your eye for more than 50 years 5. Investment returns do investment advice or a personal on the prize. go down as well as up though, and you could recommendation for any get back less than you put in. particular investment and should If you’re in it for the long-term, knee-jerk not be used as the basis of reactions in response to short-term volatility can Spreading the risk any investment decision. If you do more harm than good. Just missing out on are unsure, you should consult a handful of good days may have a devastating This is about diversification, the golden investment a Financial Adviser before impact on your total returns. rule that, perhaps more than any other, can stand investing. The value of your Research by Schroders found that a £1,000 you in good stead in both good times and bad. investments and any income investment left in the FTSE 250 since 1987 would Diversification involves spreading your money from them can go down as well have been worth almost £25,000 after 30 years. across different assets, funds, sectors and as up and you may get back If you’d missed the best 30 days in that period – companies to ensure you’re not over-exposed less than you originally invested. perhaps because you tried to ‘time the market’ – in the event of sharp falls in one or two areas. Past performance is not a guide you would have had just £6,878 to show for It’s important because history tells us there’s no to future performance. your investment. Even if you’d just missed the way of predicting which asset class or sector will This article is issued and best 10 days your investment pot would have perform best over a certain period, and which approved by Alliance Trust been be around £10,000 smaller, at £14,456 3. will likely take a tumble. Effective diversification means that if some of Savings Limited. Alliance Trust Remember though, past performance is not Savings Limited is a subsidiary a guide to future performance and may get your holdings go down, others may remain stable and some may go up, helping manage the overall of Alliance Trust PLC and is back less than you invest. registered in Scotland No. SC risk of your portfolio going down in value and 98767; registered office, PO you getting back less than you put in. Remembering the potential rewards Box 164, 8 West Marketgait, While diversification can’t prevent you from of regular investing Dundee DD1 9YP; is authorised losing money, it can reduce your potential for by the Prudential Regulation Whether you’ve invested a lump sum or you pay a losses and help to ensure you’re well placed to Authority and regulated by the modest amount in each month, the fundamentals of take advantage of opportunities that arise. Financial Conduct Authority successful investing remain the same. But there is a and the Prudential Regulation 1. particular potential advantage to regular savings, in USA Today, Bull market for stocks is turning 9, 7 March 2018. Authority, firm reference 2. The Guardian, Dow and FTSE hit record highs as global number 116115. the form of what’s known as pound-cost averaging. stock market surges continue, 4 January 2018. This refers to the way that drip-feeding money 3. CityAM, The ‘£17,808 cost’ of mistiming your FTSE This is a financial promotion into investments on a regular basis – usually investments, 21 March 2018. from Alliance Trust Savings monthly – allows you to buy assets at different 4. Quotesonfinance.com, Albert Einstein – Compound interest. Limited. prices rather that at one value. Your money will 5. The Association of Investment Companies, AIC dividend buy more units of investments when prices are heroes, 12 March 2018.

Taking Stock alliancetrustsavings.co.uk | 25 Investment trust TOP 20s Take a look at which investment trusts Alliance Trust Savings’ Investments can go down as well as up and investors can get back customers have been buying. less than they originally invested. If you are unsure if a particular These tables are based on the monetary value of purchases made investment trust is suitable for you, you should seek independent by the our investors on the dates stated below. They do not give financial advice before making any investment decision. any indication of the investment performance of the investments Investments trusts may borrow to finance further investment (gearing). trusts stated. This information is provided for educational and The use of gearing is likely to lead to volatility in the Net Asset Value informational purposes only. Any commentary provided should (NAV), meaning that a relatively small movement down or up, will not be considered as a personalised recommendation and no result in a magnified movements in the same direction, of that NAV. reliance should be placed on the rankings of any investment This may mean that you could get back nothing at all. trusts in making investment decisions.

Top 20 for 2018 to 30 June Top 20 in June 2018

1 Scottish Mortgage Investment Trust 1 Scottish Mortgage Investment Trust 2 Alliance Trust 2 Alliance Trust 3 Worldwide Healthcare Trust 3 Worldwide Healthcare Trust 4 Personal Assets Trust 4 Personal Assets Trust 5 City of London Investment Trust 5 Fundsmith Emerging Equities Trust 6 Witan Investment Trust 6 Witan Investment Trust 7 RIT Capital Partners 7 City of London Investment Trust 8 Finsbury Growth & Income Trust 8 Merchants Trust 9 Foreign & Colonial Investment Trust 9 RIT Capital Partners 10 Monks Investment Trust 10 Edinburgh Worldwide 11 Edinburgh Investment Trust 11 Herald Investment Trust 12 Merchants Trust 12 Pantheon International 13 Fundsmith Emerging Equities Trust 13 Edinburgh Investment Trust 14 Pantheon International 14 F&C Commercial Property Trust 15 Murray International Trust 15 Murray International Trust 16 Schroder European Real Estate Investment Trust 16 Monks Investment Trust 17 HICL Infrastructure Company 17 Finsbury Growth & Income Trust 18 Edinburgh Worldwide 18 Picton Property Income 19 Picton Property Income 19 Foreign & Colonial Investment Trust 20 Baillie Gifford Shin Nippon 20 Caledonia Investment Trust

26 | Taking Stock alliancetrustsavings.co.uk The flat fee difference

We charge flat Account fees. So, as your investments grow, your Account fees won’t. We think that’s only fair.

How our charges compare Flat fees can be great value at larger portfolio sizes. That’s why the comparisons below start at £50,000. The tables show the annual costs of holding your investments on Alliance Trust Savings, compared to some of our competitors who charge based on the value of your investments. Please remember that the value of your investments and any income from them can go down as well as up and you may get back less than the amount originally invested. If you are unsure as to the suitability of any particular investment or product, you should seek professional financial advice.

SIPP Account Portfolio size £50,000 £100,000 £250,000 £500,000 £1,000,000 AJ Bell Youinvest £131 £256 £631 £881 £1,381 Alliance Trust Savings £252 £252 £252 £252 £252 Bestinvest £150 £300 £750 £1,250 £2,250 Fidelity Personal Investing £175 £350 £500 £1,000 £2,000 Hargreaves Lansdown £225 £450 £1,125 £1,750 £3,000

ISA Account Portfolio size £50,000 £100,000 £250,000 £500,000 £1,000,000 AJ Bell Youinvest £131 £256 £631 £881 £1,381 Alliance Trust Savings £120 £120 £120 £120 £120 Bestinvest £200 £400 £1,000 £1,500 £2,500 Fidelity Personal Investing £175 £350 £500 £1,000 £2,000 Hargreaves Lansdown £225 £450 £1,125 £1,750 £3,000

About the comparisons: • The comparisons are of the main Account fee or platform custody charge, including any annual product charges. • For each Platform we include the cost of four trades, other dealing and service charges are excluded. You should check with each provider for the detail of all their charges. For Alliance Trust Savings you can find this in our Charges Guide at alliancetrustsavings.co.uk. • Underlying investment costs (for example the ongoing fees you’ll pay a fund manager) are also excluded and the figures we give do not reflect investment returns. We assume portfolios are invested in unit trusts and OEICs and values stay the same throughout the year. • The charges figures used for comparison were sourced by the lang cat from each provider’s website as at 25 June 2018. Charges may be subject to change in the future. • Competitors selected for comparison are direct to customer platforms offering both ISA and SIPP accounts, and charging percentage based Account fees.

If you are looking to consolidate or simply want to get more for your money, take advantage of the flat fee difference today. Visit alliancetrustsavings.co.uk.

Alliance Trust Savings Limited is a subsidiary of Alliance Trust PLC and is registered in Scotland No. SC 98767, PO Box 164, 8 West Marketgait, Dundee DD1 9YP; is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, firm reference number 116115. Alliance Trust Savings gives no financial or investment advice.

Taking Stock alliancetrustsavings.co.uk | 27 Ways to do business

Manage your account online at alliancetrustsavings.co.uk • Buy and sell online • Same day set-up and trading (conditions apply) • Online monthly dealing

Call 01382 573737 Our real-time telephone dealing service is available during normal UK market opening hours. Calls may be recorded for training and monitoring purposes.

Alliance Trust Savings Limited PO Box 164 8 West Marketgait Dundee DD1 9YP Send us your instruction form and cheque and we’ll process your trades. For full details of all charges, please visit alliancetrustsavings.co.uk

Alliance Trust Savings Limited does not give advice. If you are unsure whether an investment is right for you, you should seek professional advice. The articles in this magazine from other investment trusts have been paid for and as such are published without any representation or endorsement made by or from us of any kind whether express or implied, including but not limited to the opinions expressed, appropriateness of any recommendation made, fitness for a particular purpose, compatibility with any investment strategy or accuracy. We will not be liable for any indirect or consequential loss or damage whatever (including without limitation loss of business, opportunity, data, profits) arising out of or in connection with your reliance on any article or the contents of any article contained in this Magazine.

Alliance Trust Savings Limited is a subsidiary of Alliance Trust PLC and is registered in Scotland No. SC 98767, registered office, PO Box 164, 8 West Marketgait, Dundee DD1 9YP; is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, firm reference number 116115. Alliance Trust Savings gives no financial or investment advice.

ATS GEN MAG 0026 (Summer 2018)