Alliance Trust expects to extend the company’s 54-year record of increasing dividends.
The firm delivered a net asset value total return of the 14.8% and a total shareholder return of 11.1% in the six month period to 30 June 2021.
Both measures outperformed the MSCI all-country world index which Alliance Trust uses as its benchmark.
The Dundee-based firm also announced its second interim dividend this year of 3.7p – up 3% on the payment for the same time last year.
It said the board would be reviewing the level and funding of the company’s dividend.
Alliance Trust will explore how “a more attractive and sustainable level of distributions” may be provided to shareholders in the future.
The multi-billion pound portfolio is overseen by Willis Towers Watson, who were appointed four years ago.
Between 1 April 2017, when WTW was appointed investment manager, and the end of June this year, Alliance Trust’s total return was 58.4%, respectively, against 57.2% for the benchmark.
Alliance Trust ‘proud’ to increase dividend
Alliance Trust chairman Gregor Stewart said: “We are pleased to have comfortably outperformed our benchmark index in the first half of 2021.
“With the increasing spread of returns between companies, it is now becoming much more of a stock pickers’ market.
“That plays to the strengths of our diversified yet high conviction approach to investing.
“We recognise that the company’s delivery of a sustainable, rising income is particularly important to many of its shareholders.
“We are proud that the company has been able to increase its total ordinary dividend for 54 consecutive years.
“With increased dividends expected as a result of the global economy reopening, and the further flexibility that the conversion of the company’s £645.3 million merger reserve provides, the board has started a review of the level and funding of its dividend payments.”
Plans for net zero
The firm plans to introduce exclusions on investing in stocks with significant exposure to thermal coal and tar sands.
That will reflect its goal of “transitioning the portfolio to net zero greenhouse gas emissions” by 2050, Mr Stewart said.
The chairman added: “Excluding stocks with significant exposure to thermal coal and tar sands will not result in significant divestments.
“It reinforces our ambition to have the portfolio managed to achieve net zero greenhouse emissions by 2050 or earlier.
“The portfolio’s carbon footprint is already 32.8% lower than the benchmark.
“This decision helps to keep us on the right track.”