Alliance Trust assets reach £7bn but operation costs bite

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Alliance Trust has reported a 12 per cent rise in assets under administration on its trading platform in the first six months of the year but continued to make a pre-tax loss for the period.

In its half year results, published today, Alliance Trust Savings’ assets under administration rose by £800m to £7.2bn, driven “almost entirely” by new business inflows.

However, the business saw an operating loss for the period of £1.1m due to the acquisition of stockbroking business Stocktrade from Brewin Dolphin in May, as well as for its “planned” marketing spend during the Isa season.

The firm says the purchase of Stocktrade, however, will increase assets under administration by around 60 per cent to more than £11bn by 2020.

Third party assets under management at Alliance Trust Investments also grew by 7 per cent during the period, with net inflows of £59m.

Alliance Trust chief executive Katherine Garrett-Cox says during the six months to June the group’s results have been “disappointing”, primarily as a result of a sharp rise in bond yields in June.

The group has also decided to reduce the number of holdings in the portfolio from 88 to an historic low of 68 in order to reduce the risk exposure to global equities.

Garrett-Cox adds: “Looking ahead, it is clear that the uncertain outlook for both Greece and China has the capacity to affect equity markets for some time to come. We are confident that the team’s focus on investing in well-managed businesses for the long term will help insulate the portfolio from market volatility while continuing to generate returns for our shareholders.”