Global trust Alliance Witan’s (ALW) performance lagged the benchmark in a ‘challenging’ 2025 as the portfolio failed to keep pace with a concentrated index and stock selection disappointed.
However, the Association of investment Companies (AIC) ‘Dividend Hero’ cushioned the blow of another spell of subdued performance by increasing the dividend for the 59th consecutive year.
Steered by Willis Towers Watson, Alliance Witan is the third biggest trust in the AIC Global sector by total assets and market cap.
It uses a distinctive global multi-manager approach.
This blends the top stock selections of some of the world’s best active managers into a single diversified portfolio designed to outperform the market while carefully managing risk.
Despite another strong year for equities, Alliance Witan’s FY25 results revealed a net asset value (NAV) total return of 4.7%. That was significantly behind the benchmark MSCI All Country World Index’s 13.9% return.
Stuff of dreams?
Alliance Witan is one of many active global managers that have struggled to outperform concentrated markets lifted by passive money flows and sentiment around AI.
Last year’s underperformance versus the index partly reflected the fund’s relative lack of exposure to some AI-related businesses with ‘unproven business models’, according to Alliance Trust.
These included Palantir Technologies (PLTR), which has only ever had one full year of profitability. Palantir’s share price more than doubled in 2025, yet as the FT recently pointed out, its anticipated growth is ‘the stuff of dreams’.
Alliance Witan was also underweight banks, such as US giants JPMorgan (JPM) and Goldman Sachs (GS), as well as some of their European counterparts.
Shuffling the pack
The fund also had stock specific challenges, with spirits leader Diageo (DGE), insurer UnitedHealth (UNH) and Danish drugmaker Novo Nordisk (NVO) dragging on returns.
The stock picker that added the most value during 2025 was Japan specialist Dalton. Artisan, which joined the line up in September, also delivered strong returns.
The biggest drag on relative returns was GQG, which moved out of many highly priced AI-related names in favour of more defensive businesses.
Alliance Witan made two stock picker changes during the year, with Artisan replacing ARGA and Brown Advisory replacing SGA.
Store of value
Alliance Witan chair Dean Buckley commented: ‘Fundamentals and valuations ultimately drive share prices, and it is our belief that our portfolio is strong on both counts and represents a significant store of value relative to that of the index.’
He stressed the board ‘recognises that relative underperformance is disappointing and is fully engaged with the investment manager on seeking to improve performance for shareholders over the long term.’
2025 was the second year in a row in which Alliance Witan struggled to match strong index returns.
It should be pointed out the FTSE 100 trust still has a strong long-term track record of delivering attractive absolute returns. And Alliance Witan still looks compelling as a core investment and inflation-buster.
The company raised the total dividend for 2025 by 6.1% to 28.32p per share, marking the 59th consecutive annual increase.
Reassuringly, the board is confident annual dividend increases can continue ‘well into the future’, with payouts well supported by revenue and reserves.
Read the press release here: https://www.alliancewitan.com/investor-information/rns
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