aLLIanCE tRust eURopeAn eqUiTy FUnD


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aLLIanCE tRust eURopeAn eqUiTy FUnD

  1. 1. ASSET MANAGEMENT aLLIanCE tRust eURopeAn eqUiTy FUnD
  2. 2. It taKEs ExPERIEnCE to BuILD a HIGH ConVICtIon PoRtFoLIo oF EuRoPEan CoMPanIEs FoCusED on LonG tERM REtuRns. to create a concentrated portfolio of 25-35 holdings from the diverse range of companies and economies of Europe is no simple challenge. Head of European Equities, Fiona MacRae, has managed European investments for over 22 years and has developed a deep understanding of European markets. such knowledge can only be gained through many years of experience. Fiona and her team adopt a creative but disciplined approach to high conviction stock selection and aim to invest in their chosen companies for the long term. ExPERIEnCE Counts Fiona MacRae, Head of European Equities, is the Manager of the alliance trust European Equity Fund. she is supported by a team of three dedicated European equity analysts. the structure of the team allows for flexible and quick decision making. Fiona joined alliance trust PLC in 2008, Concentrated portfolio construction bringing to the company a rare wealth of Fiona encourages a creative but Fund highlights experience of European markets and disciplined approach to investing. a high companies. Her team is based in our conviction stock picking approach is the • Concentrated portfolio of 25 to Edinburgh office and can boast over 40 key to the fund’s long-term returns. Each 35 holdings years combined investment experience. member of the team is responsible for • High conviction stock picking In addition, the team is able to call on carrying out genuine long-term analysis approach the experience and expertise of our within the sectors they cover. a Global Financials and Global Resources pragmatic approach to building a • Long-term investment strategy: analysts, as well as our well-respected concentrated 25-35 stock portfolio is low turnover in-house Economics Research Centre to adopted and Fiona looks for the fund to • Creative and disciplined strategy assist in asset allocation and to identify offer a diversity of investment themes. market and sectoral themes. she is risk aware but not risk averse.
  3. 3. aLLIanCE tRust assEt ManaGEMEnt alliance trust European Equity Fund LooKInG FoR tHE BEst IDEas the European Equity team maintains a balanced approach across cycles. Fiona once the template is prepared, the team describes the team’s investment rationale as generally pragmatic and occasionally meets to discuss the findings. It is very contrarian. the team actively seeks those stocks which they consider are trading below much a team based discussion with the their intrinsic value – for example, a company which has a good product, but may be aim of ‘stress testing’ the idea. the driven by cyclical returns. they also look out for investments with solid management, conclusion may be that the stock does which give a high rate of return on invested capital, generate cash flow, maintain a not meet its’ criteria, that further analysis sustainable dividend policy and have a good / improving rate of return on equity. is required, or that the idea is compelling enough to be included in the portfolio. Idea Team Portfolio portfolio Construction and Monitoring Research Monitoring the portfolio is managed in a Generation Discussion Construction concentrated manner, with strong conviction in the team’s stock picking ability and a disciplined approach to both buying and selling stocks. the the formal investment process of the conferences and aim to meet with the minimum size of holding is targeted at European Equity team is based around senior management of the companies in 2% of the fund. If the value of a stock the 5 steps shown in the diagram above. which they invest at least once a year. falls below this level it is subject to It is driven primarily by a bottom-up the team uses external and internal review. a decision is then taken to either stock selection approach although there company research, further input from buy more or sell out of the stock. are times when themes and top-down the Economics Research Centre and Median holdings tend to be between issues are equally important. works closely with our Global Financials 3% and 4%. If a stock reaches its price and Global Resources analysts in order to target, it will be reviewed and a decision idea Generation and Research identify themes to assist in the stock made whether to move the target Fiona and her team use macro-economic selection process. upwards, to reduce the weighting or to input from our Economics Research sell out of the stock. sell decisions are Centre, allowing them to create a Team Discussion primarily event or development led, portfolio with the ability to take Each of the European team members such as changes in senior management, advantage of evolving market is responsible for carrying out in-depth corporate activity or earnings conditions. the team initially discusses analysis of their chosen stocks and disappointment and are not necessarily and agrees their view of the overall produces a standardised template target price or valuation led. macro picture and the individual which details: members are then able to concentrate • the company’s business activities the team monitors the risk profile within on their designated sectors and analyse the portfolio continually and ensures a the stocks within them which they • the major drivers and potential risks of level of diversification through asset consider offer the best opportunities. the company allocation and risk management. • the historic development of the although all analysis and discussion is the members of the team engage with company’s results team based, ultimate decision-making prospective investments across Europe lies with Fiona as Head of the team. through one to one meetings with • the assumptions regarding the future company management, site visits or development of the company the team’s investment process Fiona and the team have regular encourages creativity through open formal meetings including a daily discussion and lively debate. team morning meeting to discuss markets and members regularly discuss portfolio company results and a weekly meeting CoMMunICatIon: holdings and potential new ideas. the to debate stock templates. ad hoc tHE IMPoRtanCE oF analysts enjoy a positive environment to meetings to consider portfolio matters contribute ideas for possible inclusion in are held frequently. tEaM DIsCussIons the fund. overall portfolio responsibility lies with Fiona MacRae, as Head of European Equities, but the analysts have a major role in stock selection.
  4. 4. ContaCt us For more information on alliance trust asset Management and our investment capabilities, please call us or visit our website. Edward troughton Managing Director, Business Development 01382 321000 tom Pearson Director, Head of UK Retail Sales 020 7710 8800 Past performance is not a guide to future performance. the value of investments and the income from them may go down as well as up and is not guaranteed. You may not get back the amount you invested. Whilst care has been taken in compiling the content of this document, no representation or warranty, express or implied, is made by alliance trust asset Management Limited as to its accuracy or completeness. alliance trust asset Management does not give financial or investment advice. If you wish to invest, you should read the simplified Prospectus including the terms and Conditions document carefully, particularly the section on Risk Factors. the simplified Prospectus and Full Prospectus are available by calling 0844 892 0349 or by writing to alliance trust asset Management Limited, Po Box 23910, 12 Blenheim Place, Edinburgh EH7 9aJ. alliance trust asset Management Limited is authorised and regulated by the Financial services authority. Alliance Trust Asset Management Ltd 8 West Marketgait, Dundee DD1 1Qn. 09-541 (December 2009) alliance trust asset Management Limited is a subsidiary of alliance trust PLC. alliance trust asset Management Limited is registered in scotland no. sC330862, registered office, 8 West Marketgait, Dundee DD1 1Qn; is authorised and regulated by the Financial services authority whose address is 25 the north Colonnade, Canary Wharf, London E14 5Hs firm reference number 479764; gives no financial or investment advice. Investing for Generations – at alliance trust asset Management, we offer a focused range of investment solutions to meet clients’ needs. Managed by our experienced team of investment professionals using proprietary research, our unique long-term, high conviction approach to global investing has been tested and developed over generations through diverse market conditions. Furthermore, we benefit from the integrity, durability and strength of alliance trust PLC.