Alliance Trust PLC (ATST) 2024年年度報告「LSE」.pdf

1、1For the year ended 31 December 2024Annual Report2024Financial Highlights and Key Performance DataSee pages 2 to 3A Distinctive Multi-Manager Approach Information on our Stock Pickers and PortfolioSee pages 18 to 20Have Your Say Arrangements for AGM and How to VoteSee pages 124 to 135ContentsAbout U

2、s 1Strategic Report 1Our Performance 2Chairs Statement 4Combination with Witan 7Investment Managers Report 9Our Stock Pickers 18Summary of Portfolio 20Dividend 21Ongoing Charges and Discount 23What We Do 24How We Manage Our Risks 27Stakeholder Engagement 30Directors Report 36Independent Auditors Rep

3、ort 70Financial Statements 80Additional Information 108Investment Portfolio 109Ten-Year Record 115Alternative Performance Measures 116Glossary of Terms 118Company and Shareholder Information 121Annual General Meeting 124“2024 was a landmark year for your Company”Dean Buckley,Chair See pages 4 to 6Ou

4、r Investment Managers Review of the YearSee pages 9 to 171Visit our website at Investment Objective:The Companys objective is to be a core investment for investors that delivers a real return over the long term through a combination of capital growth and a rising dividend.The Company invests primari

5、ly in global equities across a wide range of different sectors and industries to achieve its objective.A portfolio to buy,hold and forget about as it compounds in valueThe Company has paid a rising dividend every year for 58 years.If you had invested 100 in the Company at the start of 1968 and you h

6、ad reinvested your dividends in additional shares,you would have shares worth 32,871 at the end of 2024.If you did not participate in dividend re-investment you would have shares worth 7,405.About UsAlliance Witan PLC is a FTSE 100 investment trust,listed on the London Stock Exchange,formed from the

7、 combination in 2024 of Alliance Trust and Witan Investment Trust(Witan),founded in 1888 and 1909 respectively.We aim to deliver long term growth in capital and income through investing in the worlds major stock markets.Our portfolio is designed to be a core investment for retail investors,professio

8、nally advised private clients and institutions.Focused stock pickingAlliance Witans portfolio uses a distinctive multi-manager approach.Eleven elite fund managers(Manager or Stock Picker)with complementary investment styles each choose no more than 20 stocks*from around the world that are expected t

9、o have the highest return potential.*Apart from GQG Partners,which also manages a dedicated emerging markets mandate with up to 60 stocks.A one-stop shop for globalsharesThe combination of diversified and high conviction stocks offers investors a unique global equities portfolio at a competitive cos

10、t.The amount of money allocated to each Manager is actively managed to ensure the portfolio stays balanced across geographies,sectors and styles.If any Stock Picker is no longer performing as it should,it can be seamlessly replaced without disrupting the whole portfolio.Find Your Comfort ZoneWe take

11、 the stress out of investing in equities,providing you with a comfortable balance between return and risk.We know investors want good returns but without chasing a particular style or manager.That is exactly what we aim to provide a hard-working foundation for your portfolio.An investment strategy t

12、hat puts your mind at ease by focusing on the destination and asmoother journey.Strategic ReportFinancial highlights as at 31 December 2024Our Performance1.Alternative Performance Measure see page 116 for further information.Notes:NAV per Share including income with debt at fair value.NAV Total Retu

13、rn based on NAV including income with debt at fair value and after all costs.Source:Morningstar and Juniper Partners Limited(Juniper).Net Asset Value (NAV)per ShareShare Price1,244.0p(2023:1,112.0p)1,304.9p(2023:1,175.1p)Share Price Total Return1+14.3%(2023:+20.2%)NAV Total Return1+13.3%(2023:+21.6%

14、)Discount to NAV1-4.7%(2023:-5.4%)Total Dividend per Share26.7p(2023:25.2p)2Strategic ReportNet AssetsEarnings per Share (Revenue)5.2bn(2023:3.3bn)17.3p(2023:18.6p)NAV Total Return(%)1This measures the performance of our assets.It combines any change in the NAV with dividends paid by the Company.13.

15、326.870.819.6Source:Morningstar and MSCI Inc.NAV Total Return based on NAV including income with debt at fair value and after all costs.Alliance WitanMSCI ACWI5010015020025028.064.7201.1190.91 year3 years5 years10 years*Share Price Total Return(%)1This demonstrates the return our shareholders have r

16、eceived through share price capital returns and dividends paid by the Company.19.626.870.814.3Source:Morningstar and MSCI Inc.Alliance WitanMSCI ACWI5010015020025029.464.9201.1221.61 year3 years5 years10 years*Comparison against Peers(%)This shows our NAV Total Return against the Total Return of the

17、 Morningstar universe of UK retail global equity funds(open-ended and closed-ended)and the AIC Global Sector.12.89.651.313.314.8Source:Morningstar and the AIC2.Alliance WitanMorningstar Peer Group Median5010015020025014.649.4151.01 year3 years5 years10 years*AIC Global Sector Average NAV Total Retur

18、n(unweighted)207.7190.964.728.0NAV per Share(pence)This shows the value per share of the investments held by the Company less its liabilities(including borrowings).1,304.9933.9Source:Juniper.Net Asset Value includes income and debt at fair value.20040060080010001200140020212020202220231,090.0989.520

19、241,175.13Learn more about the portfolio and performance1.Alternative Performance Measure see page 116 for further information.2.The Association of Investment Companies.*Includes performance prior to Willis Towers Watson(WTW)appointment as Investment Manager on 1 April 2017.Strategic ReportChairs St

20、atement Landmark combination with Witan Another strong year for equities 58th consecutive annual dividend increase Discount narrower than the AIC Global Sector average Named by the AIC as a top 20 best performing investment trust over ten years1Dear Shareholder,2024 was a landmark year for your Comp

21、any.I would like to begin by thanking you for your support for the combination of Alliance Trust and Witan to form Alliance Witan and by welcoming all shareholders who have joined us as a result.This was a pivotal moment in our history,achieving economies of scale and elevating the Company to the FT

22、SE 100.Now,as one of the industrys leaders,this status will provide better liquidity for our shares and,with good long term investment performance and a strong brand,help us attract new investors.We made a number of commitments to investors as part of the proposals,for example in respect of dividend

23、s and costs,and you will see as you read through the Annual Report how we have achieved each of these.As I mentioned in the Interim Report for the six months ended 30 June 2024,there has been no change to the Companys investment strategy,just a larger pool of assets for our Investment Manager,WTW,to

24、 manage with the same professionalism that it has brought to the job since April 2017.Investment performanceIt was another good year for global equity markets,and your Company delivered strong absolute returns.NAV Total Return was 13.3%and,due to a narrowing of the discount,Share Price Total Return

25、was 14.3%.However,we lagged our benchmark index,the MSCI All Country World Index(MSCI ACWI or Index),which returned 19.6%.We also marginally underperformed our peers in the AIC Global Sector,which is disappointing,but we were slightly ahead of the much wider,more representative Morningstar peer grou

26、p of open and closed-ended global equity funds.Simply put,our relative performance in 2024 suffered from not having enough exposure to the small number of very large companies that dominated market returns,especially in the US.4“The combination was a pivotal moment in our history”Dean BuckleyChair1.

27、https:/www.theaic.co.uk/aic/news/press-releases/top-20-best-performing-investment-trusts-for-your-isa1.Weighted average discount(excluding 3i Group).Source:Winterflood.2.Percentage based on the Companys issued share capital(excluding shares held in Treasury)as at 1 January 2025.3.Source:AIC and Morn

28、ingstar.5The narrowness of returns from global equity markets has been a common problem for all active managers in recent years,and we take comfort from the fact that,despite this persistent headwind,we are ahead of the Index and have significantly outperformed both peer groups over three years.You

29、can read more about the contributors/detractors to the Companys investment performance during 2024 in the Investment Managers Report on page 9.Dividend increased for the 58th consecutive yearThe Board declared a fourth interim dividend of 6.73p per share on 28 January 2025,resulting in a full year d

30、ividend of 26.70p,an increase of 6.0%on the prior year.This fulfils the promise we made at the time of the combination of Alliance Trust and Witan to increase dividends for the legacy shareholders of both companies.2024s increase marks the 58th consecutive annual increase,which is one of the longest

31、 track records in the investment trust industry.Dividends are well supported by revenue and reserves,and the Board is confident annual dividend increases can continue well into the future.Due to our steady approach,the Company has received a Dividend Hero investment company award from the Associatio

32、n of Investment Companies(AIC).Narrowing discount Many investment trusts continued to trade on large discounts to NAV throughout 2024,with the industry average widening to 14.7%from 12.7%.1 I am pleased to report that your Company fared better than most,with its average discount falling to 4.7%from

33、5.4%over the year.This compared favourably with the average discount for the AIC Global Sector of 7.9%.Your Board remains committed to the maintenance of a stable discount.We will continue to use share buybacks as appropriate and invest in promotional activity to widen our shareholder base,to suppor

34、t the management of the discount.During 2024,the Company bought back 4.7 million shares(1.2%of shares in issue2),versus 8.6 million repurchased in 2023.The shares bought back during the year were placed in Treasury.This level of buybacks was significantly below that of our peers,in a year in which i

35、ndustry-wide buybacks hit a record level of 7.5 billion3.The shares held in Treasury can be reissued by the Company at a premium to estimated NAV when there is market demand.Board changesFollowing the completion of the combination of Alliance Trust with Witan,we welcomed four new Non-Executive Direc

36、tors to the Board:Andrew Ross,Rachel Beagles,Shauna Bevan and Jack Perry,all of whom were former directors of Witan.Clare Dobie,having served for almost nine years,is retiring as a Director at the conclusion of this years Annual General Meeting(AGM),as is Jack Perry,reducing the size of the Board to

37、 eight members.Dean Buckley ChairStrategic Report6On behalf of the Board,I would like to thank Clare and Jack for their contributions.Further information on each of the Directors can be found on pages 37 to 40.Annual General MeetingThe Board looks forward to being able to meet shareholders again at

38、this years AGM,which will be held at the Apex City Quay Hotel in Dundee on 1 May 2025.For those shareholders who are not able to attend in person,we will be live streaming the event.As well as the formal business of the meeting,there will be an investor forum afterwards featuring two of our Stock Pi

39、ckers,Jennison and EdgePoint,as well as members of WTWs investment team.There will be another in-person investor forum in London in the autumn.In addition,shareholders can engage with the Company and its Stock Pickers via online presentations during the year.Further details of how to attend all thes

40、e events can be found on the website.The Board would strongly encourage shareholders to use the opportunity to have their say and use their vote at the AGM.Further information on the arrangements for the AGM,including information on how to vote either directly through the Registrar or though differe

41、nt platforms,is on pages 134 and 135.Keep up-to-dateIn these unusual times,the website will provide timely updates to shareholders.Therefore,I would encourage you to visit the website which contains a vast amount of information on investment performance,details of shareholder meetings and investor f

42、orums,monthly factsheets,quarterly newsletters,and Stock Picker updates,as well as the Annual and Interim Reports.The QR codes on this page will take you directly to the appropriate section on the website,where you can also subscribe to receive these updates direct to your email.As always,the Board

43、welcomes communication from shareholders and I can be contacted through Juniper Partners(Juniper),the Company Secretary at .OutlookSince the start of President Trumps second term of office in January,tariffs have created uncertainty about the outlook for equities.Diplomatic tensions over efforts to

44、end the war in Ukraine and conflict in Gaza have also raised geopolitical risks.Furthermore,European bond markets are adjusting to the prospect of increased borrowing to fund higher levels of defence and infrastructure spending.While there is a risk that heightened levels of uncertainty will impact

45、on business and consumer confidence,global growth and corporate earnings forecasts are currently healthy,giving some grounds for cautious optimism,especially if there is a broadening out of market leadership.While the Index is highly concentrated,your portfolio has broader exposure to many good busi

46、nesses that have not yet received the market recognition our Stock Pickers believe they deserve.The portfolio will not always outperform the market in every discrete period,but we believe it will continue to add significant value for shareholders in the long run.I look forward to meeting as many of

47、you as possible at the AGM in Dundee or the next investor forum in London.Dean BuckleyChair6 March 20257Combination with Witan The most significant development during the year under review was the combination of the Company with Witan.BackgroundFollowing a comprehensive review of management arrangem

48、ents,the Witan Board concluded that a combination with the Company was in the best interests of Witans shareholders.Amongst other things this allowed them continued exposure to a successful multi-manager approach.The combination was undertaken by way of a scheme of reconstruction and members volunta

49、ry liquidation of Witan.The scheme required the approval of both the Company and Witans shareholders and took effect on 10 October 2024.It resulted in the Company acquiring approximately 1,539 million of net assets from Witan in consideration for the issue of new ordinary shares to Witan shareholder

50、s.The name of the Company became Alliance Witan and the stock exchange ticker ALW.OutcomeThe combination was expected to result in substantial benefits for all shareholders and future investors.The outcomes of the key elements of the proposals include:Greater profile and FTSE 100 inclusion:the Compa

51、ny has assets of over 5 billion and is now a FTSE 100 Index constituent.Lower management fees:WTW agreed a new management fee structure;this resulted in an even more competitive blended fee rate for all shareholders.Lower ongoing charges:the new management fee structure and economies of scale have r

52、educed ongoing charges to 0.56%(net of the management fee waiver).No cost to either companies shareholders:the costs of the transaction were carefully managed,including the fee waiver from WTW,to ensure that the transaction was completed at no cost to all shareholders.Attractive and progressive divi

53、dend policy:the third and fourth interim dividend payments of 2024 were increased to ensure that they were commensurate with Witans first interim dividend.It is expected that the dividend will continue to increase in the current year so that shareholders continue to see progression in their income.P

54、ortfolio Transition The Company received assets including cash and equities from Witan and the Witan loan notes were novated to the Company.Details are provided in note 13 to the Financial Statements.BlackRock Investment Management(UK)Limited managed the portfolio transition.Direct costs of the port

55、folio transition and Manager changes were less than 0.04%of the Net Asset Value of the enlarged portfolio.8Strategic Report9Market backdrop:equities untroubled by politicsFor the second year running,global equities delivered strong returns in 2024,with economics trumping politics.Despite a record nu

56、mber of elections,conflicts in the Middle East and Ukraine reaching new heights,and a scary moment in Japan when the Nikkei Index of the top 225 blue-chip shares plunged 12%in a day at the beginning of August,investors focused on resilient global growth,falling inflation and interest rates,and healt

57、hy corporate profitability.Hence,our benchmark index,the MSCI ACWI,returned 19.6%in 2024 following a return of 15.3%in 2023.Since 1987,the Index has returned an average of 8.4%per annum1,so returns of this magnitude in two consecutive years are rare.The ebullient mood of equity investors was reflect

58、ed in a surge in the prices of less established assets,such as cryptocurrency,with Bitcoin reaching all-time highs of over$100,000.Peanut the Squirrel Coin,a cryptocurrency named after the eponymous pet that New York environmental authorities seized and euthanised on 30 October 2024,at one point com

59、manded a market cap of$1.7 billion.However,regional equity market performance was mixed.US markets once again led the way,with the S&P 500 delivering a 27%return when measured in British pounds.Chinese equities rallied briefly following government stimulus,but concerns over the countrys property mar

60、ket and trade tensions persisted.Together with a strong US dollar,these worries led to more subdued returns from emerging markets,which rose about 9%.In Japan,Augusts technically driven decline proved temporary,and the Nikkei resumed its ascent to close the year at a record high,although the yens de

61、preciation reduced returns for UK-based investors when converted into British pounds.The UK and European markets were more muted,with the FTSE All Share Index and the MSCI Europe ex UK Index returning 9.5%and 1.9%respectively.Gains driven by US tech giantsGiant US technology related stocks were the

62、standout performers,fuelled by investor excitement about generative artificial intelligence(AI)and,from November onwards,hopes that Donald Trumps victory in the presidential election would weaken regulatory scrutiny.The share prices of the so called“Magnificent Seven”Apple,Amazon,Alphabet,Meta,Micro

63、soft,NVIDIA and Tesla increased by 60%on average and were responsible for 43%of MSCI ACWIs gains.This was less than 2023 when they contributed 53%,but still a huge number emphasising the extreme concentration of index returns in a small number of companies.Investment Managers ReportCraig BakerChair

64、of the Investment Committee1.https:/ Report10Even so,from mid-year onwards,returns were no longer quite as skewed to the performance of a handful of shares.Although NVIDIA and Tesla returned a massive 176%and 65%respectively,giant tech was not the only game in town.Financial stocks returned 26.5%,an

65、d returns from the consumer discretionary,industrial and utility sectors were also well into double figures,pointing to the potential broadening out of market returns as stock-specific drivers came to the fore.Portfolio performance:strong absolute gains but lagged benchmarkindexOur portfolios NAV To

66、tal Return was a robust 13.3%but,as with most active managers,it lagged the Companys benchmark index.The portfolio does,however,remain ahead of the Index over three years(28.0%vs 26.8%),albeit behind over five years(64.7%vs 70.8%).Disappointing though it was not to beat the MSCI ACWI in 2024,we were

67、 not alone.AJ Bell calculated that,to the end of November,just 18%of active global equity funds outperformed their passive peers,largely due to their inability to match high Index weightings in the“Magnificent Seven”.The sheer size of these companies in the Index is mind boggling.NVIDIA,Microsoft an

68、d Apple,for example,represent 13%of the MSCI ACWI as at 31 December 2024 and,together,are bigger than the entire stock markets of several sizeable countries(see chart across).The skew of the Index towards mega-cap companies has been a challenge,to varying degrees,since the start of our multi-manager

69、 strategy in April 2017.As a broadly diversified strategy,with capital spread between 8-12 Managers,all with different approaches to investing,our portfolio naturally has a structural bias away from stocks that on rare occasions represent such a large proportion of our global benchmark.While we have

70、 some exposure to most of the“Magnificent Seven”,it would require a lot of the Managers to choose them as one of their best ideas for us to be at Index weight,never mind be overweight.Giant technology stocks are bigger than some countries stock marketsMarket Capital$USD BillionMicrosoft2,976 Apple3,

71、807 NVIDIA3,294 UK2,397 France1,785 Germany1,489 Canada2,093 Australia1,186 Source:MSCI Inc.The Index may have been hard to beat in recent years,but market concentration poses significant risks for passive strategies.At the end of 2024,the Index on average allocated around 150 times as much capital

72、to each of Apple,NVIDIA and Microsoft as it did to the average stock,akin to us placing about 95%of the portfolio in one managers hands and 0.5%each in the other ten.We do not believe this is the right way to manage risk for shareholders,bearing in mind that index trackers are not investing lots of

73、money in these companies because they are good businesses trading at good valuations,but because they are very big.If US large-cap stocks continue to dominate,tracker funds may continue to outperform active funds.But if sentiment on the technology sector turns sour,passive funds with big stakes will

74、 be hit much harder.Not owning enough NVIDIA waspainfulThe strong outperformance of our portfolio versus our benchmark in 2023 continued into the first quarter of 2024,when the biggest contribution came from not owning,at that time,poorly performing Tesla and Apple.But thereafter stock selection bec

75、ame more challenging,particularly within 11the“Magnificent Seven”.Although we benefitted from owning Amazon and Microsoft,we moved from an overweight to an underweight position in NVIDIA in the first quarter after its extraordinary outperformance,which then made it our biggest single detractor last

76、year as that outperformance continued.Having helped us in the first quarter,the lack of exposure to Tesla and Apple,which both recovered strongly as the year progressed,counted against us from then on.Overall,our positions in the“Magnificent Seven”accounted for a third of the portfolios underperform

77、ance versus the Index in 2024.The remainder of the portfolios underperformance came from a combination of being underweight in large-cap stocks in general and stock specific issues elsewhere,in some cases due to partial reversals of performance in 2023.For example,stock selection in financials detra

78、cted in large part due to our relative lack of exposure to strongly performing US banks such as JP Morgan and Goldman Sachs.In the consumer discretionary sector,the share price of UK-based drinks company Diageo,owned by Veritas Asset Management(Veritas)and Metropolis Capital(Metropolis),continued to

79、 suffer from a post-Covid cyclical downturn,falling 8.5%,although both Managers believe the company will eventually recover lost ground when structural trends reassert themselves.Novo Nordisk,the Danish weight loss drugs company,was another notable detractor,as its shares fell 14%after disappointing

80、 test results.Our Stock Pickers see this as a temporary decline in a growing market in which Novo Nordisk has a leading position.Hence,it was one of our biggest purchases in 2024(see table below).Indeed,our Stock Pickers express a high degree of confidence in the latent value of many of their holdin

81、gs.By far the most important long run ingredient underpinning share price performance is strong fundamentals,such as market-leading products or services,solid profit margins,plentiful cashflow and strong management.Top 10 purchases and salesTop 10 purchasesValue mTop 10 salesValue mUnitedHealth Grou

82、p 50.2 Alphabet 84.3 Novo Nordisk 48.8 NVIDIA 71.3 Synopsys 47.5 Fiserv 39.0 Microsoft 45.0 Aena 37.9 Netflix 41.5 Ebara 36.1 Philip Morris 41.4 TotalEnergies 35.0 Enbridge 39.4 PayPal 33.8 AT&T 39.0 Bureau Veritas 33.4 American Electric Power 37.3 KKR 33.2 Eli Lilly 36.6 Taiwan Semiconductor 32.2 S

83、ource:Juniper.The purchases and sales are calculated by taking the net value of all transactions(buy and sells)for each holding held within the portfolio over the period.The tables exclude any non-equity holdings such as ETFs and any transfers from the combination with Witan.Strategic Report12Even s

84、o,in the short run,market sentiment can have a larger impact on share prices than fundamentals.When we break down the portfolio performance against the Index into fundamentals and sentiment,the portfolios strong absolute performance has been mainly as a result of company fundamentals,whereas the Ind

85、exs absolute performance has been more driven by market sentiment.The chart below shows that since the start of the multi-manager strategy in April 2017,nearly three quarters of the portfolios return has come from fundamentals,whereas it accounts for only about half for the Index.This gives us confi

86、dence that our outperformance of the Index will resume when fundamentals reassert themselves.Fundamentals drive our returnsComponents of gross equity portfolio return2%4%6%8%10%12%MSCI ACWIAlliance WitanSentimentFundamentalsTotal ReturnSource:WTW,MSCI Inc.Data from 30 April 2017 to 31 December 2024.

87、Analysis based on the portfolio return gross of fees and fundamentals based on book value.Sentiment is the change in price not explained by the change in book value.A full breakdown of the contributors to our Total Return in 2024 is shown in the following table.On the following page,we also list the

88、 top five contributors and detractors to portfolio performance during the year relative to the portfolios benchmark.Contribution analysisContribution to Return in 2024%Benchmark Total Return19.6Asset Allocation-1.1Stock Selection-5.3Gearing and Cash0.6Investment Manager Impact-5.8Portfolio Total Ret

89、urn13.8Share Buybacks0.1Fees/Expenses-0.6Taxation-0.1Change in Fair Value of Debt0.4Timing Differences-0.2NAV Total Return including Income,Debt at Fair Value13.3Change in Discount1.0Share Price Total Return14.3Source:Performance and attribution data sourced from WTW,Juniper,MSCI Inc,FactSet and Mor

90、ningstar as at 31 December 2024.Percentages may not add due to rounding.Sands,Vulcan and Lyrical were the topperformersAs we would expect from such a diverse line up,performance among our Managers was mixed.This is by design,as we do not want the portfolio to be biased towards any one approach of in

91、vesting,which might make returns vulnerable to a sudden switch from one style to another.This happened in 2022 when growth stocks began to suffer significantly as central banks raised interest rates to combat inflation.Sands Capital(Sands),Vulcan Value Partners(Vulcan),and Lyrical Asset Management(L

92、yrical)were the top performers last year.Sands and Vulcan both benefitted from owning tech giants.Sands held NVIDIA while Vulcan held Amazon,but Sands largest contributor to relative performance was Axon Enterprise,an industrial business which makes tasers,body cameras and other software products.It

93、s share price surged by 134%last year.13Top five stock contributors to performanceStockSectorCountryAverage Active Weight(%)TotalReturn inSterling(%)Attribution Effect Relative to Benchmark(%)AmazonConsumer Discretionary United States 1.0 47.0 0.2 Axon Enterprise IndustrialsUnited States 0.2 134.2 0

94、.2 SalesforceInformation TechnologyUnited States 0.4 29.8 0.2 NRG EnergyUtilitiesUnited States 0.4 80.6 0.2 NestleConsumer StaplesSwitzerland-0.4 -25.9 0.2 Bottom five stock detractors to performanceStockSectorCountryAverage Active Weight(%)TotalReturn inSterling(%)Attribution Effect Relative to Ben

95、chmark(%)NVIDIAInformation TechnologyUnited States-1.8 176.1-1.2 BroadcomInformation TechnologyUnited States-0.5 113.4-0.6 Novo NordiskHealth CareDenmark 0.8-14.0-0.6 TeslaConsumer Discretionary United States-0.8 65.4-0.6 AppleInformation TechnologyUnited States-3.9 32.8-0.4 Source:WTWThe tables abo

96、ve illustrate the top five contributors and detractors to returns relative to benchmark in 2024.It aims to explain at a stock level which companies drove relative returns.For example,the Alliance Witan portfolio was underweight relative to benchmark in NVIDIA,Broadcom,Tesla and Apple.These stocks ha

97、d very strong returns,which hurt our portfolios relative performance.Conversely,not having an exposure to Nestle helped our relative performance given the stock was held in the benchmark and was down over the year.Our overweight position in Amazon,Axon Enterprise,Salesforce and NRG Energy contribute

98、d positively to relative returns given their strong performance.The average active weight is the arithmetic simple average weight of the stock in the portfolio minus the arithmetic simple average weight of the stock in the benchmark over the period.Vulcans largest contributor to our performance was

99、KKR,the US-based private equity group,which returned 82%,prompting Vulcan to take profits.Its holding in Salesforce also did well,rising nearly 30%.Lyrical,a deep-value style investor,benefitted from owning several less talked-about US-based companies,which all rebounded from cheap valuations.These

100、included NRG Energy,Ameriprise Financials and eBay.Of our Managers,the most notable laggard was Sustainable Growth Advisors(SGA),which was disappointing given its focus on large cap growth stocks which,as a group,had the strongest price momentum.SGA suffered from holding Novo Nordisk,and two of its

101、other positions,ICON and Synopsys also stood out as detractors.The recent poor performance of SGA follows a long period of outperformance,so returns since we appointed SGA remain strong.Value Managers Metropolis and ARGA Investment Management(ARGA),the latter replacing Jupiter Asset Management(Jupit

102、er)in April,also struggled in the recent market environment,which has generally favoured growth managers.Strategic Report14Portfolio changes:two new Managers added after combination with WitanAs well as adding ARGA for Jupiter in the first half of the year,following Ben Whitmores decision to leave J

103、upiter to set up his own business,there were two further changes to the Manager line up during the integration of Witans portfolio.Altogether,this contributed to an unusually high level of turnover of 98.5%of the portfolio in 2024.Both Alliance Trust and Witan already had GQG Partners(GQG)and Verita

104、s in common,which meant that there were some in-specie transfers of stocks.Additionally,the combination of Alliance and Witan presented us with an opportunity to introduce Jennison Associates(Jennison)to the portfolio at a low cost.Based in the US,Jennison specialises in investing in innovative,fast

105、-growing businesses.It had been one of Witans most successful managers and blending it with our other Managers increased the diversity of holdings in growth companies.We also took the opportunity to replace Black Creek Investment Management(Black Creek)with EdgePoint Investment Group(EdgePoint),whil

106、e we were using a transition manager to keep costs down to a minimum.The combination provided a unique opportunity to enhance our portfolio with high-quality managers at low cost.This change was prompted by succession planning at Black Creek.We had been monitoring Black Creek for some time due to th

107、e departure of a senior team member for health reasons and the uncertainty surrounding the timing of founder Bill Kankos retirement.With a similar investment style to Black Creek,EdgePoint seeks to buy good,undervalued businesses and hold them until the market fully realises their potential.Through

108、the combination,we inherited a small number of investment trust and private equity fund holdings,representing less than 3%of the combined portfolio.These are specialist funds with portfolios focused on,among other things,early-stage life sciences,valuable intellectual property,innovative internet pl

109、atforms and renewable infrastructure assets.Collective investments such as these are not normally part of our investment strategy.However,they are all trading at prices we believe are well below their intrinsic value,so rather than sell them at a loss,we will hold them until we can achieve attractiv

110、e values.Beyond that,the combination did not lead to any change in our investment approach.We retain high conviction in our line-up of Managers and their ability to pick winning stocks,although we keep them under constant review for any red flags and have access to a deep bench of talented replaceme

111、nts should these be needed.Gearing:remaining cautiousOur gross gearing stood at 8.4%at the end of 2024(4.9%net of underlying Manager and central cash),slightly above the level of 7.1%at the start of the year,reflecting the improving outlook for equities as the year progressed.However,given the stron

112、g performance from equity markets,it is still towards the lower end of the typical range of 7.5 to 12.5%.15Market outlook:multiple risks warrant diversificationAs 2025 began,the mood among investors was upbeat,with many hoping President Trumps promises of deregulation and tax cuts would be supportiv

113、e of equity markets.If returns can spread beyond a narrow group of highly valued US mega-cap technology stocks,it could provide firmer foundations for another good year for shares.The strong start to the year for European equities certainly offered hope for geographical diversification.However,on-of

114、f tariffs and geopolitical tensions loom large,creating considerable uncertainty.This was reflected in an increase in equity market volatility in February.In the first 2 months of 2025,the benchmark index rose by 2.2%suggesting that investors were still willing to look through some of the risks whil

115、e forecast global growth and corporate earnings remain healthy.But confidence is fragile and,with valuations in the US still close to a record high despite Februarys pullback(see chart),the market is vulnerable to setbacks.In this environment,we believe bottom-up stock picking,based on company funda

116、mentals,should be a more reliable way to add value for shareholders in the long term than making bold,top-down market calls.So,we will continue to position the portfolio to maintain balanced regional,sector and style exposures,that are similar to the Index weightings by periodically adjusting Manage

117、r allocations.This should provide stability and reduce risk,while we rely on our Managers to add value by seeking out the best companies in each market segment.While retaining some exposure to US mega-cap tech stocks that may continue delivering attractive returns,our portfolio is not reliant on the

118、m.It also contains many stocks that have remained in the shadows but have been performing well operationally and have excellent prospects not yet reflected in their share prices.US markets reach a high123456price-to-book ratioMay-90May-00May-10May-20May-24The price-to-book ratio measures the market

119、value of the S&P 500 Index compared to the book value of the underlying consistuents of the Index.Source:Bloomberg,Apollo Chief Economist.16Strategic ReportThe securities referred to above represent the views of the underlying managers and are not stock recommendations.Hidden gems:stock picks with h

120、igh potential We asked our eleven Stock Pickers for examples of strong but underappreciated companies in theportfolioLyrical highlighted five of its US holdings that have underperformed the S&P 500 Index since the start of 2024 but,at the same time,have grown their forecast earnings per share by mor

121、e than the Index.These are healthcare providers Cigna and HCA,WEX and Global Payments,which both provide business-to-business payment technology,and Gen Digital,which is a leading provider of cyber security and identity protection.The markets focus on mega-cap tech has left many high-quality busines

122、ses overlooked.Our managers are finding value in sectors ranging from cyber security to automation andhealthcare.“Interestingly,even on this list there is inconsistency by the market,”says Lyrical.“Cigna has the worst stock performance,but the second-best earnings per share(EPS)growth.Gen Digital ha

123、s the slowest EPS growth in the group,but the best performance”.ARGA cited Accor,the global hotel business,which has transitioned to an“asset light”business model by selling most of its hotels,while maintaining the lucrative franchise and management agreements attached to these properties.While Sand

124、s Capital sees potential in the share prices of Sika,a maintenance and building refurbishment specialist.“Investment results have been weak despite solid fundamental results,”says Sands.“We believe that investors have focused on slower than historical organic growth,caused by several factors,includi

125、ng the real estate crisis in China,slowdown in electric vehicle production,and a pause in green building incentives.”Sands Capital also mentioned Roper Technologies,a diversified industrial technology company,and Keyence,a leading designer of high-end factory automation based in Japan,as attractive

126、businesses with share price appreciation potential.Vulcan highlighted CoStar Group,an information provider to the commercial and residential real estate industries,and Everest Group,a global insurance and reinsurance business,while GQG mentioned the UK-based pharmaceutical company AstraZeneca,the Br

127、azil-based oil and gas company Petrobras,Bank Mandiri in Indonesia,and the Indian tobacco company ITC.SGA backed Danaher,the US industrial group,Intuit,which provides do-it-yourself accounting software for small businesses,and HDFC Bank in India.Jennison highlighted Reddit,the online social media pl

128、atform.“Reddit is targeting 49%growth in the third quarter of 2024 and consensus is at 41%in Q4,but then market estimates are fading down to around 20%in 2025,which we think is overly conservative and creates an opportunity for investment today.”17Veritass nominations for underappreciated businesses

129、 were Amadeus,the Spanish software company focusing on air travel,The Cooper Companies,which makes contact lenses,and Thermo Fisher Scientific,the worlds largest scientific equipment provider.Japan specialist Daltons best stocks included Bandai Namco,a multinational that publishes video games and ma

130、kes toys,Shimano,the bicycle equipment manufacturer,and Rinnai,one of the global leaders in water heaters.Metropolis highlighted Andritz,the Austrian headquartered business supplying industrial equipment to the pulp and paper,metals and hydropower industries,Crown Holdings,which makes aluminium drin

131、ks cans,and Admiral,the UK insurer.Finally,EdgePoint,the newest addition to our Manager line-up,pointed to Dayforce,a global human resources software company,Nippon Paints Holdings in Japan,Franco-Nevada,a gold-focused royalty company in Canada,and Qualcomm,which invented significant pieces of the u

132、nderlying technology required for mobile phones.“The market looks at Qualcomm as a handset supplier and the stock moves in relation to expected handset sales over the following quarters,”says EdgePoint.“We consider Qualcomm to be one of the worlds leading designers of energy-efficient processors at

133、a point in time when demand for energy-efficient processing is growing rapidly across a wide range of industries.Some of the major opportunities for Qualcomm over the next 5 years include artificial intelligence,automobiles,personal computers and smartphones.”Altogether,these fundamentally strong bu

134、sinesses combine with others to create a robust,multi-manager portfolio that offers attractive long-term growth with lower risk than a single manager strategy,and therefore a more comfortable ride through the ups and downs of the market.Such companies may have remained below the radar in 2024,when i

135、nvestors became giddy with the stellar returns from the US technology shares,but we look forward to their attributes receiving the recognition from the market that they deserve.Craig Baker,Stuart Gray,Mark DavisWillis Towers WatsonInvestment ManagerThe securities referred to above represent the view

136、s of the underlying managers and are not stock recommendations.18Strategic ReportStock PickerBackgroundInvestment style%of portfolio by value at 31 December 2024GQG Partners is an investment management firm focused on global and emerging markets equities.Headquartered in Fort Lauderdale,Florida,USA,

137、it managed assets of$153bn as at 31 December 2024.Seeks large capitalisation,high-quality companies,with durable earnings growth over the long-term;quality at a reasonable price.19%(21%at 31 Dec 2023)(includes both global and emerging markets mandates)Veritas Asset Management was established in 2003

138、 and is run with a partnership structure and culture.It has offices in London and Hong Kong.As at 31 December 2024 it managed 17.7bn.Aims to grow real wealth over five-year periods by looking for highly cash-generative protected businesses benefitting from enduring growth trends.14%(15%at 31 Dec 202

139、3)Sustainable Growth Advisers is based in Stamford,Connecticut,USA,and manages US,global,emerging markets and international large-cap growth portfolios.As at 31 December 2024 it had assets under advisement of$24.8bn.Seeks differentiated companies that have strong pricing power with recurring revenue

140、,strong cash flow generation and long runways of growth.11%(13%at 31 Dec 2023)Metropolis Capital is a UK-based firm with a value-based investment style.It had 3.8bn of assets under management as at 31 December 2024.Focuses on long-term market recognition of the fundamental value of its investments a

141、nd income generated from those investments.10%(10%at 31 Dec 2023)Vulcan Value Partners is based in Birmingham,Alabama,USA,and was founded in 2007.As at 31 December 2024 it managed$7.1bn for a range of clients including endowments,foundations,pension plans and family offices.Focuses on protecting cap

142、ital and generating returns by investing in companies with high-quality business franchises trading at attractive prices.8%(6%at 31 Dec 2023)ARGA Investment Management is a global value manager headquartered in Connecticut,USA,with offices in the UK and India.It manages global,US,non-US and emerging

143、 markets equity portfolios for institutional and qualified investors,overseeing$18.0bn as at 31 December 2024.ARGA believes that investor sentiment and management behaviour create opportunities to identify quality businesses selling at attractive valuations.They use a Dividend Discount Model(DDM)to

144、select stocks that trade at a discount to intrinsic value based on long-term earnings power.8%(0%at 31 Dec 2023)Our Stock Pickers1.Please note that AUM includes the discretionary and non-discretionary assets of Sands Capital Management,LLC as of 31/12/2024,and the gross assets of all funds(not inclu

145、ding uncalled capital)for Sands Capital Ventures,LLC.Figures for Sands Capital Ventures,LLC are updated 45-60 days after each quarter-end.1919Stock PickerBackgroundInvestment style%of portfolio by value at 31 December 2024Lyrical Asset Management is a boutique advisory firm based in New York with 33

146、8 clients.It oversees$7.5bn in assets as at 31 December 2024.Lyrical describes its approach as finding the gems amid the junk.It seeks to own quality companies with attractive growth and simpler business models amid the cheapest 20%of the US universe.7%(6%at 31 Dec 2023)EdgePoint Investment Group is

147、 an independently owned discretionary investment manager based in Toronto,Canada.It oversees$39.8bn in assets as at 31 December 2024,managing global and Canadian equity portfolios,global and Canadian balanced portfolios,and fixed income portfolios.EdgePoints investment team are long-term investors i

148、n businesses.It views a stock as an ownership interest in a company and endeavours to acquire these ownership stakes at prices below their assessment of their true worth.EdgePoint looks for misunderstood change at the business level,or a change that leads to mispriced opportunity.7%(0%at 31 Dec 2023

149、)Jennison Associates is an investment advisor headquartered in New York with$211.0bn in assets under management as at 31 December 2024.It manages portfolios for institutional,sub-advisory and private clients through separately managed and commingled vehicles,including mutual funds.Jennison believes

150、that sustainable alpha generation is possible through finding growing companies where either the duration and/or the magnitude of that growth is being underestimated by the market.Deep fundamental research is conducted to identify those companies,with specialist analysts who focus only on finding th

151、e best growth ideas in the world.6%(0%at 31 Dec 2023)Dalton Investments is a disciplined and opportunistic investment management firm with a focus on Asia and a particular expertise in Japan(its largest strategy).As at 31 December 2024 Dalton managed$4.2bn in actively managed long-only and long/shor

152、t strategies.Dalton implements a value approach with a focus on the alignment of interests between management and shareholders.Client portfolios are built from the bottom up,one security at a time,with each security being selected on its own merits,through rigorous fundamental analysis to calculate

153、an“intrinsic”value.5%(5%at 31 Dec 2023)Sands Capital1 is an independent,employee-owned firm headquartered in the Washington,D.C.area.As at 31 December 2024,the firm managed$54.1bn in client assets.Focuses on finding high-quality,wealth creating growth businesses that can sustain above-average earnin

154、gs growth over the long term.5%(4%at 31 Dec 2023)20Strategic ReportTop 20 holdingsNamem%Microsoft236.34.3Amazon197.43.6Visa156.22.8UnitedHealth Group116.42.1Alphabet107.71.9Diageo92.41.7Meta88.61.6NVIDIA82.71.5Aon75.11.4Novo Nordisk73.11.3Netflix70.91.3Mastercard70.71.3Eli Lilly69.91.3Salesforce61.5

155、1.1HDFC Bank58.21.1Safran53.31.0Taiwan Semiconductor49.90.9Petrobras48.10.9State Street48.00.9Philip Morris47.60.9The 20 largest stock positions,given as a percentage of the total assets.Each Stock Picker selects up to 20 stocks.*Top 20 holdings 32.9%Top 10 holdings 22.2%*Apart from GQG Partners,whi

156、ch also manages a dedicated emerging markets mandate with up to 60 stocks.Individual holdingsOur portfolio looks very different from the benchmark.Active shareThe measure of how different theportfolio is from the benchmark.Country/sector allocationSimilar to benchmark by designBy geographyPortfolio

157、weight Benchmark weightStock Picker CashAsia&Emerging MarketsEuropeUKNorth America62.6%69.3%5.9%3.1%13.1%10.5%15.2%17.1%3.2%0.0%By sectorA full list of the Companys Investment Portfolio can be found on pages 109 to 114 of this report.Summary of Portfolio73%Active ShareInformation Technology 23.0%Fin

158、ancials 16.9%Consumer Discretionary 14.1%Industrials 11.2%Health Care 9.3%Communication Services 8.4%Consumer Staples 4.9%Materials 3.6%Energy 2.7%Utilities 1.9%Real Estate 0.8%Stock Picker Cash 3.2%As at 31 December 202421DividendWe have paid our shareholders a rising dividend for 58 consecutive ye

159、ars.Providing that level of reliability is something of which we are extremely proud.We carefully manage the Companys dividend.For instance,should there be a year in which income is unexpectedly high,we may retain some of that income to help fund future dividends.Due to our steady approach,the Compa

160、ny has received a Dividend Hero investment company award from the Association of Investment Companies(AIC).Our dividend policySubject to market conditions and the Companys performance,financial position and outlook,the Board will seek to pay a dividend that increases year on year.The Company expects

161、 to pay four interim dividends per year,on or around the last day of June,September,December and March,and will not,generally,pay a final dividend for a particular financial year.While shareholders are not asked to approve a final dividend,given the timing of the payment of the quarterly payments,ea

162、ch year they are given the opportunity to share their views when they are asked to approve the Companys Dividend Policy.Fourth interim dividendAs previously announced,a fourth interim dividend of 6.73p per ordinary share will be paid on 31 March 2025 to those shareholders who were on the register at

163、 close of business on 28 February 2025.Increased dividendThe Company has increased its total dividend for the year ended 31 December 2024 to 26.7p per ordinary share(2023:25.2p),a 6.0%increase on the previous year.Dividend 2024(p)2023(p)%increase1st Interim 6.626.187.12nd Interim 6.626.344.43rd Inte

164、rim 6.736.346.24th Interim 6.736.346.2The following chart shows the growth in the Companys dividend over the last 58 years.It also shows what has been achieved for investors to date.If you had invested 100 in the Company at the start of 1968 and you had reinvested your dividends in additional shares

165、,you would have shares worth 32,871 at the end of 2024.If you did not you participate in dividend re-investment you would have shares worth 7,405.22Strategic ReportReinvesting dividends boosts long-term returnsDividend per Share(p)(RHS)2024 Dividend per Share(p)(RHS)Return rebased to 100 at 31 Janua

166、ry 1969()Dividend per Share(p)500010,00015,00020,00025,00035,000Total Return(LHS)Capital Return(LHS)051015202530030,000196919731977198119851989199319972001200520092012201620202024Past performance does not predict future returns.Source:Alliance Witan and WTW.Data as of 31 December 2024 unless otherwi

167、se stated.Total Shareholder Return is the sum of the change in the share price plus dividend income reinvested;Capital Return excludes the impact of dividends reinvested.ReservesIt is the Boards intention to utilise distributable reserves as well as portfolio income to fund dividend payments.Further

168、 details of the dividend payments for the year to 31 December 2024 and information on distributable reserves can be found in notes 7 and 2(b)(x)of the Financial Statements,respectively.23Ongoing Charges and DiscountOngoing charges1The Companys ongoing charges ratio(OCR)decreased to 0.56%(including t

169、he impact of the investment management fee waiver as detailed on page 42)(2023:0.62%).Total administrative expenses were 3.9m(2023:2.9m)and investment management expenses were 18.4m(2023:16.3m).Further details of the Companys expenses are provided in note 4 of the Financial Statements on page 90.The

170、 Companys costs remain competitive for an actively managed multi-manager global equity strategy.The chart below shows how the Companys ongoing charges compared to the other constituents of the AIC Global Sector.Our costs remain competitiveConstituents of the AIC Global SectorAlliance WitanOngoing ch

171、arges(%)00.20.40.60.81.01.21.4Note:The costs shown for the other constituents of the AIC Global Sector include ongoing costs.Data sourced from the AIC website as at 31 December 2024.Maintaining a stable discount1One of the Companys strategic objectives is to maintain a stable share price discount to

172、 NAV.The Company has the authority to buy back its own shares in the market if the discount is widening and to hold these shares in Treasury.During the year under review,the Companys share price traded at an average discount of 4.7%(2023:6.0%).As at 31 December 2024,the Companys share price discount

173、 was 4.7%(2023:5.4%).The average discount(unweighted)for the AIC Global Sector was 7.9%.Share issuance and buybacksAs a result of the combination with Witan,120,949,382 new ordinary shares were issued for assets valued at 1.5bn implying an effective issue price of 12.7459246 per share.The Company bo

174、ught back 1.2%*(2023:3.0%)of its issued share capital during the year,purchasing 4,722,000 shares which were placed in Treasury.The total cost of the share buybacks was 57.0m(2023:86.6m).The weighted average discount of shares bought back in the year was 5.7%.Share buybacks contributed a total of 0.

175、1%to the Companys NAV performance in the year.Steady discount since 2017Cost of share buybacks(m)Discount(%)Cost of Buybacks(LHS)Average Discount(RHS)2004006008001,0001,2002015 2016 2017 20182019 2020 2021 2022 2023 20242468101214Cost of Buybacks Source:Juniper.1.Alternative Performance Measure see

176、page 116 for details.*Percentage based on the Companys issued share capital(excluding shares held in Treasury)as at 31 December 2024.24Strategic ReportWhat We DoHow WTW manages the portfolioWTW as Investment Manager has overall responsibility for managing the Companys portfolio.It is the Investment

177、Managers job to select a diverse team of expert Stock Pickers,each of whom invest in a customised selection of 10-20 of their best ideas.WTW then allocates capital to them,relative to the risks the Stock Picker represents.For example,small-cap stocks are typically more risky than large-cap stocks,so

178、 on average a small-cap specialist would tend to receive less capital than a Stock Picker who focuses on large-cap stocks.However,the allocations do not remain static;WTW keeps them under constant review and varies them over time according to market conditions,with the goal of keeping our exposures

179、to different parts of global stocks markets well balanced.Stock Pickers are encouraged to ignore the benchmark and only buy a small number of stocks in which they have strong conviction,while WTW manages risk through the Stock Picker allocations.On their own,each of the Stock Pickers high-conviction

180、 mandates has the potential to perform well.This is supported by WTWs experience of managing high-conviction portfolios and academic evidence1.But concentrated selections of stocks can be volatile and risky,so WTW mitigates these dangers by blending Stock Pickers with complementary investment approa

181、ches or styles,which can be expected to perform differently in different market conditions.This smooths out the peaks and troughs of performance associated with concentrated single-manager strategies.Several of the Stock Pickers in the current portfolio have been with the Investment Manager since in

182、ception of the multi-manager strategy,though it does actively monitor and rearrange the line-up where necessary.Information on all the Stock Pickers as at 31 December 2024 can be found on page 18.WTW invests a lot of time and effort on identifying skilled Stock Pickers for the Companys portfolio,und

183、ertaking extensive qualitative and quantitative analysis.This due diligence process focuses on:The investment processes,resources and decision-making that make up the Stock Pickers competitive advantage;The culture and alignment of the organisation that leads to sustainability of that competitive ad

184、vantage;Their approach to responsible investment.WTW aims to appoint Stock Pickers who actively engage with the companies in which they invest and have an effective voting policy.When necessary,they challenge the Stock Pickers and guide them towards better practices;and The operational infrastructur

185、e that minimises risk from a compliance,regulatory and operational perspective.1.Sebastian&Attaluri,Conviction in Equity Investing,The Journal of Portfolio Management,Summer 2014.25The Investment Managers views are formed over extended periods from multiple interactions with the Managers,including r

186、egular meetings.They look beyond past performance numbers to try to understand the competitive edge.This involves examining and interrogating processes for selecting stocks,adherence to this process through different market conditions,team dynamics,training and experience.Performance track records a

187、re just a single data point,and,without the context of the additional information,they are unlikely to persuade WTW that a Stock Picker is skilled.Once selected,the Investment Manager tends to form long-term partnerships with the Stock Pickers,generally only taking them out of the portfolio if somet

188、hing fundamental changes,such as the departure of a key individual from the business or a change in business strategy or fortunes.With highly active,concentrated portfolios,periods of short-term underperformance are to be expected and are not a reason to doubt a Stock Picker if they are adhering to

189、their philosophy and process.WTW does,however,keep a constant eye out for talent and may bring new Managers into the portfolio at the expense of an incumbent if they are a better fit.Responsible investmentWTW believes that Environmental,Social and Governance(ESG)factors have the potential to impact

190、financial risk and return.As long-term investors,WTW aims to incorporate these factors into its investment process.As stewards of the Companys assets,WTW seeks to integrate responsible investment into its process for managing the portfolio.ESG factors can influence returns,so these risk factors are

191、taken into account in WTWs investment processes,including assessing how Managers evaluate ESG risk in their decisions over what stocks to purchase.Climate change poses potential significant risks to investment returns from many companies,which is why both WTW and the Company have stated an intention

192、 to manage the assets with a goal of achieving Net Zero greenhouse gas emissions from the portfolio by 2050,with an interim intention of reducing portfolio emissions by approximately 50%by 2030,relative to 2019.In 2024,we saw an increase in the portfolios weighted average carbon intensity(which meas

193、ures carbon emissions as a proportion of revenue)from 71.9tCO2e/$M sales to 117.9tCO2e/$M sales.Over the year,some higher-emitting stocks came into the portfolio including,industrial company Alaska Air and materials company Alcoa Ord,and our allocation to the higher-emitting Utilities sector went up

194、 slightly with purchases of companies such as Southern Ord and American Electric Power.We are monitoring our progress against our Net Zero goal,and our Managers and EOS at Federated Hermes(EOS)continue to engage with the companies in the portfolio on climate related issues.Progress towards Net Zero

195、will not be linear.Emissions from the portfolio are dependent on holdings,which can change from year to year as WTWs Stock Pickers seek value for investors.If companies are perceived as being at higher financial risk by being slow to adapt to a Net Zero world,we expect to use stewardship,such as vot

196、ing and engagement,to encourage positive changes to business practices.WTW believes this is preferable to excluding companies from the portfolio,since exclusion merely passes the responsibility of ownership to other investors who may be less scrupulous about adherence to ESG standards or regulation.

197、As well as engaging with companies on climate change,WTWs Stock Pickers,together with stewardship provider EOS,focused on a wide range of other issues last year.26Strategic ReportOverall,EOS engaged with 97 companies in the portfolio on 515 issues and objectives throughout the year.Key areas of enga

198、gement included board effectiveness,climate change,human and labour rights and human capital,biodiversity,digital rights and AI.Of these engagements,the environmental category accounted for 29%of the total number of engagements,with 63%of environmental engagements relating to climate change.Meanwhil

199、e the Stock Pickers cast votes at 3,346 resolutions in 2024.Of these resolutions,they voted against company management on 386 and abstained from voting on 38 occasions.The topics and the breakdown of the ways in which our stock pickers voted are detailed in the following charts.How the Stock Pickers

200、votedNumber of votes with management 87.3%Number of votes against management 11.5%Number of votes abstained 1.1%Source:WTW and EOS at Federated Hermes.Data as at 31st December 2024.Note:Total percentages may not add up to 100 due to rounding differences.Reasons for voting against managementAudit Rel

201、ated 1%Source:WTW and EOS at Federated Hermes.Data as at 31st December 2024.Note:Total percentages may not add to 100 due to rounding differences.Capitalisa?on 5%Company Ar?cles 1%Compensa?on 18%Corporate Governance 2%Director Elec?on 40%Director Related 5%Environmental&Social Blended 1%Environmenta

202、l 2%Miscellaneous 1%Non-Rou?ne Business 10%Rou?ne Business 3%Social 12%Strategic Transac?ons 2%Takeover Related 1%27How We Manage Our RisksIn order to monitor and manage risks facing the Company,the Board maintains and regularly reviews a risk register and heat map.The risk register details all prin

203、cipal and emerging risks thought to face the Company at any given time.The principal risks facing the Company,as determined by the Board,are Investment,Operational and Legal and Regulatory Non-Compliance.As part of its review process,the Board considers input on the principal and emerging risks faci

204、ng the Company from its key service providers WTW and Juniper.Any risks and their associated risk ratings are then discussed,and the risk register and heat map updated accordingly,with additional measures put in place to monitor,manage and mitigate risks as required.During the period the Board caref

205、ully reviewed the risks associated with the implementation of the combination and the post transaction integration risks.Principal risksThe principal risks facing the Company,how they have changed during the year and how the Board aims to monitor and manage these risks are detailed on the following

206、pages.Risk and potential impactRisk ratingHow we monitor and manage the riskInvestmentMarket risk:loss on the portfolio in absolute terms,caused by economic and political events,interest rate movements and fluctuation in foreign exchange rates.Increased due to geopolitical and macro-economic uncerta

207、inty The Board sets investment guidelines and the Investment Manager selects Stock Pickers and styles to provide diversification within the portfolio.The Board receives regular updates from the Investment Manager and monitors adverse movements and impacts on the portfolio.An explanation of the diffe

208、rent components of market risk and how they are individually managed is contained in note 18 to the Financial Statements.Investment performance:relative underperformance makes the Company an unattractive investment proposition.Stable The Companys investment performance against its investment objecti

209、ve,relevant benchmark and closed and open ended peer group are reviewed and challenged where appropriate by the Board at every Board meeting.The Board receives regular reporting from the Investment Manager to allow it to review the approach to ESG and climate risk factors embedded within the investm

210、ent process from the Companys perspective.28Strategic ReportRisk and potential impactRisk ratingHow we monitor and manage the riskStrategy and market rating:demand for the Companys shares decreases due to changes in demand for the Companys strategy or secular changes in investor demand.Stable The Bo

211、ard regularly reviews the share register and receives feedback from the Investment Manager and broker on all marketing and investor relations and shareholder meetings,to keep informed of investor sentiment and how the Company is perceived in the market.The Board monitors the Companys share price dis

212、count and,working with the broker undertakes periodic share buybacks as appropriate to meet its strategic objective of maintaining a stable discount.The proposed combination with Witan and the benefits to ongoing investors in terms of scale and investor proposition were reviewed and thoroughly consi

213、dered to ensure the enlarged Company would be an attractive proposition for both current and prospective shareholders.Capital structure and financial risk:inappropriate capital or gearing structure may result in losses for the Company.Stable The Board receives regular updates on the capital structur

214、e of the Company including share capital,borrowings,structure of reserves,compliance with ongoing covenants and shareholder authorities,to allow ongoing monitoring of the appropriate structure.The Board reviews and manages the borrowing limits under which the Investment Manager operates.As part of t

215、he Witan combination,additional borrowing was novated to the Company.These additional facilities provide an increased blend of interest rates and maturity dates.Shareholder authority is sought annually in relation to share issuance and buybacks to facilitate ongoing management of the share capital.O

216、perationalAll of the Companys operations are outsourced to third party service providers.Any failure in the operational controls of the Companys service providers could result in financial,legal or regulatory and reputational damage for the Company.Operational risks include cyber security,IT systems

217、 failure,inadequacy of oversight and control,climate risk and ineffective disaster recovery planning.Stable The Board monitors the services provided by the key services suppliers and formally reviews the performance of each on an annual basis,including the review of audited internal control reports

218、where appropriate.No material issues were raised as part of the evaluation process in 2024.Cyber security continues to be a key focus for the Board.Reports on the cyber security,IT testing environment and disaster recovery testing of each key service provider are reviewed by the Board annually.Any b

219、reaches in controls which have resulted in errors or incidents are required to be immediately notified to the Board along with proposed remediation actions.29Risk and potential impactRisk ratingHow we monitor and manage the riskLegal and regulatoryFailure to adhere to all legal and regulatory requir

220、ements could lead to financial and legal penalties,reputational damage and potential loss of investment trust status.Stable The Board has contracted with its key service suppliers,including the Investment Manager and Juniper,in relation to its ongoing legal and regulatory compliance.The Board receiv

221、es quarterly reports from each supplier to monitor ongoing compliance.The Company has complied with all legal and regulatory requirements in 2024.Any breaches in controls which have resulted in errors or incidents are required to be immediately notified to the Board,along with proposed remediation a

222、ctions.The review of the Annual Report by the independent auditors provides additional assurance that the Company has met all legal and regulatory requirements in respect of those disclosures.Emerging risksEmerging risks are typified by having a high degree of uncertainty and may result from sudden

223、events,new potential trends or changing specific risks where the impact and probable effect is hard to assess.As the assessment becomes clearer,the risk may be added to the risk matrix of known risks.The Board is currently monitoring a number of emerging risks:geopolitical tension continues to be an

224、 emerging risk for the Company due to ongoing conflicts across the world.Along with increased populism and nationalism,these risks may impact individual economies and global markets.Although covered in the operational risk section above,the Board recognises the increased risk that cybercrime and the

225、 misuse of AI poses to the Company.Geopolitical events such as the conflicts in the Middle East region,coupled with the potential breakdown of post war alliances and potential new trade tariffs and changes to US economic and international policies introduced by President Trump,could bring uncertaint

226、y and fragility to capital markets in 2025,including persistent or reacceleration of inflationary pressures.Stakeholder Engagement Section 172 Statement30Strategic ReportThe Directors have a number of obligations including those under section 172 of the Companies Act 2006.These obligations relate to

227、 how the Board takes account of various factors in making its decisions including the impact of its decisions on key stakeholders.The Board is focused on the Companys performance and its responsibilities to stakeholders,corporate culture and diversity,as well as its contributions to wider society,an

228、d it takes account of stakeholder interests when making decisions on behalf of the Company.As an externally-managed investment trust,the Board considers the Companys key stakeholders to be existing and potential new shareholders and its service providers.Engaging with stakeholdersThe table below set

229、s out the primary ways in which the Board engages with the Companys key stakeholders:StakeholderHow we engageShareholders and potential investorsThe Board places great importance on clear and effective communication with all existing shareholders and any potential new shareholders through a variety

230、of different communications.The Board engages with the Companys shareholders in a number of ways:at the AGM,General Meetings and investor events;through its investor relations and marketing activities,including meetings between individual shareholders and members of the Board;and through its website

231、,annual and interim reports,newsletters and factsheets.31StakeholderHow we engageShareholders and potential investors continuedExamples of engagement during the year under review include:The Board was pleased to welcome shareholders in person to the Companys 2024 AGM.Those shareholders who were not

232、able to attend in person were able to view the meeting and ask questions remotely.The Companys upcoming AGM will have the same facility.The Board was pleased that,at the 2024 AGM,no significant votes were received against any of the resolutions put to shareholders.Shareholders and potential investor

233、s also had the opportunity to join two investor forums in Dundee(April)and London(October).The Investment Manager and the Companys broker reported regularly to the Board on meetings held with shareholders,sharing their views and also reporting on any changes to the composition of the share register.

234、The Investment Manager also arranged meetings with relevant industry press and other appropriate media channels.The Board welcomes all shareholder views.Shareholders wishing to communicate directly with the Board can do so by contacting the Company Secretary by email or post.Contact details can be f

235、ound on page 121.32Strategic ReportStakeholderHow we engageService providersThe Company has outsourced various activities to key service suppliers,including the Investment Manager and Juniper.Open and constructive dialogue between the Board and its key service providers is essential for ensuring the

236、 efficient running of the Companys day to day business.The Board seeks to engage with the key service suppliers in a collaborative and collegiate manner,both in and out of Board meetings.The Board works closely with the dedicated teams at each of its service providers,but also has the opportunity to

237、 meet members of other business areas,for example Risk and Compliance,to discuss specific matters.WTW and Juniper are responsible for overseeing many of the relationships with other service providers and report regularly to the Board on the services provided to the Company.The Management Engagement

238、Committee reviews the performance of service providers and makes recommendations to the Board on their continuing appointment.The Audit and Risk Committee reviews the internal controls and risk management systems in place at key service providers when considering the preparation of the Annual Report

239、 and Financial Statements.The Investment Manager,on behalf of the Board,maintains a constructive working relationship with the Companys lenders as required.Examples of how the Board has considered stakeholders in its decision makingExamples of how the Board considered stakeholders in its decision ma

240、king during the year are detailed below.Key decisionsStakeholder(s)impactedOutcomeCombination with WitanOne of the key decisions during the year was the combination with Witan.Following detailed consideration the Board concluded that the combination was in the best interests of shareholders as a who

241、le.Shareholders of both companies were given the opportunity to vote on the proposed combination.Following such approvals,the combination took place on 10 October 2024.Service providers/shareholdersA number of specific objectives were stated as part of the proposals.The key outcomes of these have be

242、en:Greater scale and prospect of FTSE 100 inclusion:this has been achieved and the Company has net assets of 5.2 billion as at 31 December 2024 and was admitted to the FTSE 100 Index on 23 December 2024.33Key decisionsStakeholder(s)impactedOutcomeCombination with Witan continued Lower management fee

243、s:the Board took the opportunity to renegotiate the ongoing management fee with a lower blended rate than was previously applicable to both companies.Lower ongoing charges:the Board reviewed the ongoing charges and cost savings that could be achieved as part of the combination which has resulted in

244、lower ongoing charges.Attractive and progressive dividend policy:the third and fourth interim dividends of 2024 were increased to ensure they were commensurate with Witans first interim dividend.The Company plans to continue to increase the dividend,ensuring shareholders will continue to see a progr

245、ession in their income.No direct cost to shareholders of both companies:costs are being reimbursed to the Company by way of a management fee waiver.BorrowingThe Board transferred the existing borrowing facilities utilised by Witan.The Board also engaged an independent advisor to undertake a full rev

246、iew of the Companys borrowing facilities to ensure that the transfer of the Witan borrowing facilities was in the best interests of the Company and its shareholders.Shareholders/service providers 155m of secured fixed rate loan notes were novated from Witan,contributing to a reduction in the weighte

247、d average cost of borrowing from 4.07%to 3.77%and a broader mix of maturities,now ranging from 2029 to 2054.These new borrowing facilities provide the Company with further diversification of bank counterparties.34Strategic ReportKey decisionsStakeholder(s)impactedOutcomeDividendsSubject to market co

248、nditions and the Companys performance,financial position and outlook,the Board seeks to pay a dividend that increases year on year.During the year,the Board considered income receipts,forecast dividends,inflation,and the dividend yield of other investment trusts in the AIC Global Sector.Shareholders

249、 Shareholders received a total dividend of 26.7p per share for the financial year ended 31 December 2024,a 6.0%increase on the previous year(2023:25.2p).The Company has paid shareholders a rising dividend for an industry leading 58 consecutive years.The Company continues to have sufficient distribut

250、able reserves to fund future dividends.Discount managementThe Board has continued to buy back shares at a discount to NAV.A key strategic objective of the Board is to maintain the share price trading close to NAV.Shareholders During the year under review the Company repurchased 4,722,000 of its own

251、shares which were placed in Treasury.The weighted average discount of shares bought back in the year was 5.7%.As at 31 December 2024,the Companys share price discount had narrowed to 4.7%(from 5.4%at 31 December 2023)providing a small uplift in share price per share(see Contribution Analysis table o

252、n page 12).35Key decisionsStakeholder(s)impactedOutcomeRebrandThe Company completed its brand review,which included undertaking investor research to improve communication with shareholders,to raise the profile of the Company and to attract new investors to increase shareholder returns.Further discus

253、sions on brand also took place in advance of the combination with Witan,to ensure the change of name of the Company to Alliance Witan and agree that the brand remained appropriate for all shareholders following the combination.Shareholders Enhanced Company website and refreshed brand.The new Company

254、 branding has been supported by a marketing campaign designed to make clear the benefits of investing in the Companys,which should help attract new investors.The brand work was thoroughly tested before launch to ensure it was appropriate.Board compositionAs part of the combination process,the Nomina

255、tion Committee considered any skills that would enhance the current Board,and approved the appointment of four new Directors.The Board noted that this would take the number of Directors on the Board to ten and agreed that this should be reduced to eight by the 2025 AGM.Shareholders Andrew Ross,Rache

256、l Beagles,Shauna Bevan,and Jack Perry,all former Directors of Witan,were appointed to the Board on 10 October 2024.Board diversity has also been enhanced and further details can be found on page 52.Clare Dobie and Jack Perry will retire as Directors of the Company at the AGM on 1 May 2025.Dean Buckl

257、eyChair6 March 202536Directors ReportOperational StructureBoard of Directors Sets stragetic objectives for the Company Independent Non-Executive Directors Selects and monitors the Investment Manager and other key suppliers Determines dividend and gearing policy and agrees service provider fees Respo

258、nsible for oversight of corporate governanceBoard Committees and Working Groups Audit and Risk Committee Management Engagement Committee Nomination Committee Marketing Oversight GroupInvestment Manager Manages portfolio Selects Stock Pickers Allocates capital to Stock Pickers Utilisation of gearing

259、Undertakes marketingStock Selection Each Stock Picker invests in a customised selection of 10-20 of its best ideas1Administrator and Company Secretary Supports the Board with the day-to-day administration of the Company and ongoing statutory compliance Supports shareholder queries and meetings Provi

260、des fund accounting and administration services Produces financial statements,daily NAV and regular financial reporting for the BoardJuniperStock Pickers8 to 12Board of Directors1.Apart from GQG Partners,which also manage a dedicated emerging markets mandate with up to 60 stocks.WTW37Board of Direct

261、orsDean joined the Board on 4 March 2021 and was appointed as Chair on 1 January 2024.Dean is a qualified actuary and has enjoyed a career in fund management.Dean was previously Chief Executive Officer of Scottish Widows Investment Partnership.Prior to that,Dean held several positions at HSBC Bank p

262、lc,most recently as Chief Executive Officer of HSBC Asset Management UK&Middle East.Dean held senior fund management positions at Prudential Portfolio Managers and was also previously a Non-Executive Director of Saunderson House Limited.He was also Chair of the Audit Committee,Remuneration Committee

263、 and Senior Independent Director of JPMorgan Asia Growth&Income plc.Other Appointments:Fidelity Special Values PLC Chair JPMorgan Emerging Markets Investment Trust plc Non-Executive Director Baillie Gifford&Co Limited Non-Executive Director Evelyn Partners Fund Solutions Limited ChairDean BuckleyCha

264、ir(Independent)M NAndrew joined the Board on 10 October 2024 following the Companys combination with Witan Investment Trust PLC.He was formerly Chair of Witan.Andrew was previously Chief Executive of Cazenove Capital Management which,in 2013,was acquired by Schroders,where he became Global Head of W

265、ealth Management until 2019.Prior to this,he was Chief Executive of HSBC Asset Management(Europe)Limited and Managing Director of James Capel Investment Management.He has substantial experience in senior leadership roles as CEO and chairman of investment management and wealth management businesses,w

266、here he has overseen three different multi-manager businesses.Other Appointments:Polar Capital Holdings Non-Executive Director Cadogan Settled Estates Non-Executive DirectorAndrew RossDeputy Chair(Independent)M NGuide to Curent Appointments Listed operating companies and their subsidiaries Unlisted

267、operating companies and their subsidiaries Investment companies and investment trusts OtherBoard Committee AppointmentsA Member of the Audit and Risk CommitteeM Member of the Management Engagement CommitteeN Member of the Nomination Committee38Directors ReportSarah joined the Board on 4 March 2021.S

268、arah is a Fellow of CFA UK and was previously Chair of the Association of Investment Companies.Sarah was also previously Chair of Polar Capital Technology Trust plc,Merian Global Investors Limited,St James Place plc,JPMorgan American Investment Trust plc,Witan Pacific Investment Trust plc and Chair

269、of the Audit Committees of New India Investment Trust plc and of U and I Group plc.Sarah was a founder of the Diversity Project and formerly an Ambassador for Chapter Zero.She was also Chair of the Nomination Committee and Senior Independent Director of Worldwide Healthcare Trust PLC,and Chair of Jo

270、hn Lewis Partnership Trust for Pensions.Other Appointments:BBC Pension Scheme Independent Member of the Investment Committee and Chair of BBC Pension Investment Limited USS Investment Management Limited ChairSarah BatesSenior Independent DirectorA M NJo joined the Board on 29 January 2020 and was ap

271、pointed Chair of the Audit and Risk Committee in March 2020.Jo is a chartered accountant and has previously held senior positions within the NatWest Group and was Finance Director of Newcastle United plc.She was Commercial Director,UK,Europe and the Middle East at Serco Group and sat on various advi

272、sory boards in the education and charity sector.Jo was also previously Chair of JPMorgan European Growth and Income PLC,Non-Executive Director and Chair of the Audit Committee of Strategic Equity Capital PLC,and Non-Executive Director of Ventus VCT PLC.Other Appointments:Bellevue Healthcare Trust PL

273、C Senior Independent Director and Chair of Audit Committee Institute of Chartered Accountants in England and Wales FellowJo DixonIndependent Non-Executive Director and Chair of the Audit and Risk CommitteeA M NRachel joined the Board on 10 October 2024 following the Companys combination with Witan I

274、nvestment Trust PLC.She was formerly a Non-Executive Director of Witan.Rachel was Managing Director and Co-head of pan-European banks equity research and sales at Deutsche Bank.She was Chair of the Association of Investment Companies,Securities Trust of Scotland PLC and Parkinsons UK Investment Comm

275、ittee.She was also a Non-Executive Director of the asset manager,Gresham House plc and the workplace pensions provider,Cushon Group Limited.Other Appointments:The Mercantile Investment Trust plc Senior Independent Director and Chair Designate Rachel BeaglesIndependent Non-Executive DirectorA M N39Sh

276、auna joined the Board on 10 October 2024 following the Companys combination with Witan Investment Trust PLC.She was formerly a Non-Executive Director of Witan.Shauna has over twenty five years of investment experience working predominantly with retail clients.In her current role at RiverPeak she is

277、responsible for fund research and portfolio construction.She was previously Co-Head of Collectives Research and Co-Head of the Collectives Portfolio Service at Charles Stanley,having started her career in wealth management at Merrill Lynch.Other Appointments:RiverPeak Wealth Head of Investment Advis

278、ory CT Global Managed Portfolio Trust PLC Non-Executive DirectorShauna BevanIndependent Non-Executive DirectorA M NClare joined the Board on 26 May 2016.Clare started as a journalist working at the BBC,Times and Independent,where she was City Editor.From there she joined Barclays Global Investors,wh

279、ere she was Head of Marketing,and later she moved to GAM as Group Head of Marketing.She then ran a marketing consultancy serving financial services firms.She is a former Non-Executive Director of Aberdeen New Thai Investment Trust PLC,CT UK Capital and Income Investment Trust PLC,Schroder UK Mid Cap

280、 Fund PLC,and Southend Hospital.Clare is retiring as a Director of the Company at the AGM on 1 May 2025.Other Appointments:NoneClare DobieIndependent Non-Executive DirectorA M NVicky joined the Board on 29 September 2022.Vicky has over 35 years experience in the investment management industry.She wa

281、s a European Equity fund manager before holding senior leadership roles at Merrill Lynch Investment Managers and JO Hambro Capital Management.Vicky was previously an Independent Non-Executive Director of JPMorgan Asset Management UK Ltd and JPMorgan Asset Management International Ltd and a Non-Execu

282、tive Director of Henderson Global Trust Plc,Charter European Trust Plc,Edinburgh Investment Trust PLC,and Impax Environmental Markets PLC.Other Appointments:Henderson European Trust Plc Chair Mountbatten IOW Ltd Director(Trustee)Mountbatten Hampshire Ltd Director(Trustee)Vicky HastingsIndependent No

283、n-Executive DirectorA M N40Directors ReportMilyae joined the Board on 29 September 2022.Milyae began her career as a qualified accountant in the US and has experience running and advising companies in over 40 countries.She has held senior global executive positions spanning investment banking and ot

284、her financial services,retail,consumer,and technology,including at Tesco,Marks&Spencer,and Accenture.In addition,Milyaes recent advisory experience has focused on digital transformation and growth,as well as ESG.She was previously a Governor of the London Museum and the Chair of London Museum Tradin

285、g Ltd.Other Appointments:Fidelity European Trust PLC Non-Executive Director THG Group PLC Non-Executive Director Faber and Faber Limited Non-Executive DirectorMilyae ParkIndependent Non-Executive DirectorA M NJack joined the Board on 10 October 2024 following the Companys combination with Witan Inve

286、stment Trust PLC.He was formerly a Non-Executive Director of Witan.Jack was previously Chairman of European Assets Trust PLC,Chief Executive of Scottish Enterprise and a former Managing Partner and Regional Industry Leader of Ernst&Young.He is also Chairman of one other listed investment company and

287、 has served on the boards of FTSE 250 and other public and private companies.Jack is retiring as a Director of the Company at the AGM on 1 May 2025.Other Appointments:ICG-Longbow Senior Secured UK Property Debt Investments Chairman Institute of Chartered Accountants of Scotland MemberJack PerryIndep

288、endent Non-Executive DirectorA M N41The Directors submit the Annual Report and Accounts of the Company for the year ended 31 December 2024.The Corporate Governance statement,Directors biographies,the Report of the Audit and Risk Committee and the Remuneration Report all form part of this Directors R

289、eport.Purpose The Company is a public limited company and an investment company granted investment trust status by HM Revenue&Customs.It aims to deliver a real return over the long term through a combination of capital growth and a rising dividend at a competitive cost.On page 1 we set out the Compa

290、nys investment objective.This,together with the investment policy below,was approved by shareholders at the AGM held in April 2019.Investment policy The Company,through its Investment Manager,appoints a number of Stock Pickers with different styles and approaches,each of which will select and invest

291、 in stocks for the Companys single investment portfolio;it will achieve an appropriate spread of risk by holding a diversified portfolio in which no single investment may exceed 10%of the Companys total assets at the time of investment.Where market conditions permit,the Company may use gearing of no

292、t more than 30%of its net assets at any given time.The Company can use derivative instruments to hedge,enhance and protect positions,including currency exposures.While the primary focus of the Company is investment in global equities,the Company may also invest from time to time in fixed interest se

293、curities,convertible securities and other assets.Strategic objectivesThe Boards strategic objectives are to:meet the key performance indicators and alternative performance measures as detailed on pages 2 and 116;continue its policy of paying a progressive dividend;maintain a stable share price disco

294、unt to Net Asset Value,and where practicable,to facilitate the shares trading at close to NAV;and provide good value to its shareholders.AIFM Directive(the Directive)Towers Watson Investment Management Limited,a wholly owned subsidiary of Willis Towers Watson(both referred to as WTW),was appointed a

295、s the Companys Alternative Investment Fund Manager(AIFM)with effect from 1 October 2019.The Company has appointed NatWest Trustee and Depositary Services Limited(formerly National Westminster Bank plc)as its depositary under the Directive for the purpose of strengthening the arrangements for the saf

296、e custody of assets.Directors Report42Directors Report Regulatory disclosures,including the Companys Investor Disclosure Document,are provided on the Companys website at .Disclosures on Remuneration as required under the Directive can also be found on our website.Investment management agreementOn 15

297、 December 2022,the Company entered into an amended and restated AIFM agreement with WTW(the Amended Management Agreement).The amendments included details of further marketing and distribution,public relations and investor relations services that WTW has been appointed to provide from 31 December 202

298、2,as well as a new fee arrangement between the Company and WTW that reflected these additional responsibilities and the other changes made to the Companys operating model.The investment management and distribution services fee payable to WTW from 1 January to 9 October 2024 was as follows:0.57%per a

299、nnum on such part of the Companys market capitalisation that is less than or equal to 2.5 billion;0.54%per annum on such part of the Companys market capitalisation that exceeds 2.5 billion but is less than or equal to 4 billion;and 0.52%per annum on such part of the Companys market capitalisation th

300、at is in excess of 4 billion.As a result of the combination with Witan,the Company entered into an Amendment and Fee Waiver Agreement with WTW.With effect from 10 October 2024,the investment management and distribution services fee payable to WTW is as follows:0.52%per annum on market capital that i

301、s less than or equal to 2.5 billion;0.49%per annum on market capital that exceeds 2.5 billion but is less than or equal to 5.0 billion;and 0.46%per annum on market capital that is in excess of 5.0 billion.The investment management and distribution fee accrues daily(based on the market capitalisation

302、 of the Company as at close of business on the previous business day)and is payable monthly in arrears.From the investment management and distribution fee,WTW will meet payment of such fees as are agreed from time to time in respect of the Stock Pickers.Each Stock Picker is entitled to a base manage

303、ment fee rate,generally based on the value of assets under management.No performance fees are payable.The Amended Management Agreement may be terminated by either party on not less than six months notice.The Amended Management Agreement may also be terminated earlier by either party with immediate e

304、ffect and without compensation on the occurrence of certain events.On termination,WTW is entitled to receive its fees pro rata to the date of termination.Company secretarial,finance andadministrationOn 15 December 2022,the Company entered into a Secretarial and Administration Agreement with Juniper.

305、Juniper was formally appointed as Company Secretary to the Company on 31 December 2022 and began providing finance and administration services to the Company with effect from 1 April 2023.The Secretarial and Administration Agreement may be terminated by either party on not less than six months notic

306、e.The Secretarial and Administration Agreement may also 43be terminated earlier by either party with immediate effect and without compensation on the occurrence of certain events.Further details of the investment management fees and other administration fees paid by the Company can be found in note

307、4 in the Notes to the Financial Statements on page 90.Share capitalThe Companys issued share capital as at 31 December 2024 comprised 405,193,982 ordinary shares(shares)of 2.5p each,of which 5,002,000 are held in Treasury.At the last AGM held on 25 April 2024,shareholders renewed the Companys author

308、ity to repurchase up to 14.99%of shares in issue and also authorised that shares repurchased may be held in Treasury.Furthermore,shareholders renewed the Companys general authority to issue shares both from Treasury and new shares,at a premium to estimated NAV at the general meeting in October 2024.

309、These authorities will be proposed for renewal at the AGM on 1 May 2025.The Company made use of this authority during the course of the year and repurchased 4,722,000 shares at a cost of 57.0m.DividendA fourth interim dividend will be paid to shareholders on 31 March 2025 details of which can be fou

310、nd on page 21.Voting rightsThere are no agreements in place with any parties in respect of voting rights in the Companys shares.As at 6 March 2025,being the latest practical date prior to the publication of this report,Rathbones Investment Management held voting rights attaching to 5.3%of the shares

311、 of the Company.The Company is not aware of any other shareholders holding over 3%of the total voting rights.Responsible investmentOn page 25,WTW describes the responsible investment activities it,the Stock Pickers and EOS have undertaken for the Company.The Company also reports on these activities

312、in its quarterly Responsible Investment Report which can be found on its website:The Company has placed restrictions on a small number of types of companies in which the Stock Pickers are prohibited from investing.These are:Companies involved in controversial weapons in accordance with the ESG Data

313、Providers methodology(currently MSCI Global ex Controversial Weapons Indexes).Controversial weapons can be defined by the severe harm they cause to civilians during and after conflicts,and the significant long-term health and safety effects they have on civilian populations.The production and use of

314、 certain weapons have been regarded as unacceptable under international conventions and illegal within certain jurisdictions.Companies that derive more than 25%of revenues from thermal coal mining or sales to third parties;derive more than 50%of revenues from thermal coal power generation;or derive

315、more than 25%of revenues from oil sands extraction.Willis Towers Watson.Directors Report 44The Company supports the UK Stewardship Code published by the Financial Reporting Council(FRC).It aims to enhance the quality of engagement between institutional investors and the companies in which they inves

316、t,to help improve long-term risk-adjusted returns to shareholders and the efficient exercise of governance responsibilities.WTW is a signatory to the 2020 UK Stewardship Code(Code)and reports annually on its adherence to the Code.These reports can be found on its website()where you can also find out

317、 about its ESG commitments.Streamlined Energy and Carbon(SECR)ReportingAs all of the Companys activities are outsourced to third parties,the Company has no greenhouse gas emissions to report from its operations,nor does it have responsibility for any other emissions-producing sources under the Compa

318、nys Act 2006(Strategic Report and Directors Report)Regulations 2013.The Company considers itself to be a low energy user under the SECR regulations and therefore is not required to disclose energy and carbon information.Business ethics The Company considers that it does not fall within the scope of

319、the Modern Slavery Act 2015,and it is not,therefore,obliged to make a slavery and human trafficking statement.The Company considers its supply chains to be of low risk as its suppliers are typically professional advisers.A statement from WTW,the Companys Investment Manager,on the steps it takes to i

320、nvestigate and mitigate the risk of modern slavery and human trafficking can be found on WTWs website ().The Company conducts its business honestly,fairly and with transparency and takes anti-bribery measures very seriously.The Company is committed to implementing and enforcing effective measures to

321、 counter bribery and corruption and has a zero-tolerance approach to acts of bribery and corruption by Directors or anyone acting on the Companys behalf.The Company also has zero tolerance for financial crime such as tax evasion or the facilitation of tax evasion.Financial risk managementFinancial r

322、isk management objectives and information on exposure to price risk,credit risk,liquidity risk and cash flow risk can be found in Note 18 on page 100.Corporate Governance45The Board is committed to achieving and demonstrating high standards of corporate governance.The AIC Code of Corporate Governanc

323、e issued in February 2019(AIC Code)provides a framework of best practice for investment companies and can be found at www.theaic.co.uk.The Financial Reporting Council(FRC)has confirmed that AIC member companies who report against the AIC Code will be meeting their obligations in relation to the 2018

324、 UK Corporate Governance Code.The Company has complied with the Principles and recommended Provisions of the AIC Code during the year ended 31 December 2024 and up to the date of this report,except as set out below:Provision 37:As all Directors are Non-Executive,and the Company now has no employees,

325、the Board does not consider it necessary to form a Remuneration Committee.All matters in respect of Director remuneration are dealt with by the Board as a whole.Provision 26:The Board last held an external evaluation for the financial year ended 31 December 2021,which was conducted by Board Level Pa

326、rtners;and accordingly an external evaluation was due to be undertaken for the financial year ending 31 December 2024.Following the combination with Witan and the appointment of four new(former Witan)Directors to the Board in October 2024,on the recommendation of the Nomination Committee,the Board a

327、greed that it was impractical to hold an external evaluation in 2024 and that it should be postponed until 2025.A revised AIC Code was issued in August 2024,and will come into effect for accounting periods beginning on or after 1 January 2025(with the exception of Provision 34 which will come into e

328、ffect for accounting periods beginning on or after 1 January 2026).The Board will review the Companys governance arrangements to ensure ongoing compliance with the updated AIC Code.BoardThe Board is responsible to shareholders for the effective stewardship of the Company,including determining the in

329、vestment policy and strategy.The Board is also responsible for the gearing,dividend and share issuance/buyback policies,public documents such as the Annual Report and Financial Statements,and corporate governance matters.The Board holds its main meetings on a quarterly basis,with additional portfoli

330、o update and Stock Picker meetings held throughout the year.46Directors ReportAt its regular meetings,the Board reviews investment performance and associated matters such as gearing,asset allocation,marketing/investor relations,discount,costs,risk,compliance,share buybacks and the performance of pee

331、r investment trusts.Representatives of the Investment Manager and the Company Secretary attend each meeting.Board or Board Committee meetings are also held on an ad hoc basis to consider issues as they arise.Ad hoc working groups involving the Directors are arranged to support the work of the Board

332、or relevant Board Committee on particular topics.Outside the formal meetings there is also regular contact between the Investment Manager,the Administrator and the Directors.Chair and the Deputy ChairThe Chair is responsible for leading the Board and for its overall effectiveness.Their letter of app

333、ointment,which is available at the Companys registered office and at the AGM,clearly sets out their responsibilities.The Deputy Chair is responsible for the oversight of Witans links and corporate history in the interests of all shareholders.In the event of the Chair being unable to act for any reason in the short term,the Deputy Chair would also be available to step in and lead the Board on an in