Fund manager remains open to hiring despite poor performance

The half yearly results of Scottish fund manager Alliance Trust are an exercise in conservatism - a portfolio almost entirely comprised of equities which managed to avoid the market rally because the firms involved were too risky. Nonetheless, in spite of relative underperformance, it remains open to recruiting.

The firm's chief executive Katherine Garrett-Cox admitted to being surprised by the stock market rally in March and April, which saw the fund's performance slip relative to its peers for the first half of this year.

But she defended Alliance Trust's conservative approach: "We elected to remain consistent to our long term approach, continuing to invest only in companies which we believe are strong and will generate both sustainable capital growth and income rather than just short term gains."

Not surprisingly, it's still keeping a close eye on costs, but since moving its investment team to a centralized office in Dundee, the firm has been keen to add to its ranks.

It said: Despite the constraints of our budgetary controls, we have managed to strengthen the skills of our management team and have recruited key personnel who will assist in the development of our subsidiary businesses.

In January, Alliance Trust hired Jonathan Bolton as head of Japanese equities and last month recruited Rod Davidson, Gareth Quantrill, Stuart McMaster and Stuart Stevenson for a new fixed income team. Yesterday, it also announced the appointment of Robert Burgess as an executive director to its board and chief executive of Alliance Trust Savings.

The fixed income team starts in January, and has been recruited to allow the equities team to focus on growth prospects outside of the UK. The firm remains firmly focused on equities, and its exposure has increased from 77% in January to 81% as at 31 July.