Alliance Trust's Strategic Review Outcome

Closed-end funds and OEICs
scrumpyjack
Posts: 14
Joined: November 4th, 2016, 10:15 am

Re: Alliance Trust's Strategic Review Outcome

Postby scrumpyjack » December 20th, 2016, 5:46 pm

Presumably physically buying the shares would incur stamp duty whereas buying CFDs doesn't

Also it may be that physically buying 4 million shares would put the SP up rapidly - would have thought CFDs might do as well, though ATST have been buying shares back in the market on a relatively large scale - over 8 million in the last few days

Maybe Elliott want the SP increase to make it seem the market approves of the strategy and a new much lower discount becomes the norm.

Lootman
Lemon Slice
Posts: 551
Joined: November 4th, 2016, 3:58 pm

Re: Alliance Trust's Strategic Review Outcome

Postby Lootman » December 20th, 2016, 6:54 pm

scrumpyjack wrote:Presumably physically buying the shares would incur stamp duty whereas buying CFDs doesn't

Also it may be that physically buying 4 million shares would put the SP up rapidly - would have thought CFDs might do as well, though ATST have been buying shares back in the market on a relatively large scale - over 8 million in the last few days

Maybe Elliott want the SP increase to make it seem the market approves of the strategy and a new much lower discount becomes the norm.

I would have thought that whoever is doing the CFD deal with Elliott would have to hedge their position, either by buying the underlying or via options (if options even exist on ATST). Usually corporate raiders want to be able to influence proxy battles but you need to actually hold the shares to do that, rather than derivatives.

Or maybe it's just year-end window-dressing?

InTheHighlands
Posts: 2
Joined: November 7th, 2016, 11:03 am

Re: Alliance Trust's Strategic Review Outcome

Postby InTheHighlands » January 3rd, 2017, 12:34 am

Does anyone know what the World Equity Index actually is? Notably, does it include reinvested dividends? If it doesn't, then the 2% presumably represents under-performance in real terms......

Hariseldon58
Posts: 26
Joined: November 4th, 2016, 9:42 pm

Re: Alliance Trust's Strategic Review Outcome

Postby Hariseldon58 » January 3rd, 2017, 10:57 pm

InTheHighlands

If you visit the AIC site you can download a very useful set of stats for Investment Trusts, this also contains the figures for a variety of indices and allows a direct comparison on the performance of a trust. http://www.theaic.co.uk/aic/statistics/aic-stats

In the case of Alliance its performance does not compare favourably with a World Index, the stats on the site reflect dividends reinvested.

In fact the size weighted average of all investment trusts does not compare favourably with a World Index, a factor in this may be the large concentration of US holdings which have had a good run recently. The stats are very interesting and worth a look if you are not familiar with them.


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