Alliance Trust : Report and Accounts 2023

Annual Report and Financial Accounts 2023

INVESTING

FOR GENERATIONS

INTRODUCTION

Our approach brings together the 'best ideas' from expert stock pickers. Each is responsible for

Strategic Report

1. Introduction

1. Our Performance

Catering for every generation, Alliance Trust aims to grow your capital over time and provide rising income by investing in global equities.

Investment objective

The Company's 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 primarily in global equities across a wide range of different sectors and industries to achieve its objective.

CONTENTS

A CORE HOLDING FOR ALL GENERATIONS

Our portfolio's blend of stock pickers and their customised stock selections makes Alliance Trust a strong, core holding for long-term investors seeking capital growth and rising income. Whatever your financial goal, be it saving for university or a first home, building a pension

or leaving a legacy, we're built to help you achieve this.

Proven resilience

Established in 1888, we've successfully navigated two world wars, multiple economic crises, the Covid-19 pandemic and numerous political upheavals.

Low maintenance

Our ready-made portfolio does all the hard work for you. With thousands of funds to choose from, it can be daunting finding the time and having the confidence to be your own wealth manager. By using experts to select and monitor a team of top-rated stock pickers, who in turn choose their

investing in a selection of high conviction equities."

Dean Buckley

Chair

When combined, our portfolio's country and sector exposures resemble the index1 but its individual holdings are very different. This high level of divergence is designed to maximise potential for outperformance.

Expert manager selection

All the stock pickers are chosen by our investment manager, Willis Towers Watson ('WTW'), a leading global investment business.

WTW researches thousands of managers globally, before selecting a diverse team of expert stock pickers for Alliance Trust.

To control risk, WTW then balances the amount of capital allocated to each of them. Due to the modular construction of the portfolio, if a stock picker needs to be replaced, this can be done smoothly.

Responsible ownership

1. Longer-TermPerformance z Chair's Statement
   z Investment Manager's Report z Our Stock Pickers
   z Investment Portfolio z Dividend
   z Ongoing Charges & Discount z How We Manage Our Risks

Directors' Report

Independent Auditor's Report

Financial Statements

Other Information

most attractive stocks, we provide a simple, high-quality way to invest in global equities at a competitive cost.

Diversified by country, industry and style

Our approach doesn't depend on the skill of a single high-profile individual. It's a team effort which means the portfolio can add value through varying stock market cycles and deliver more consistent returns.

All of our stock pickers have different but complementary approaches to investing. This means our holdings are well diversified across countries, industries and investment styles to seek a wide range of opportunities while minimising risk.

Focused stock picking

Although well diversified, we avoid hugging the Company's benchmark index1 by asking the stock pickers to choose no more than 20 stocks2 in which they have the highest level of conviction.

Our approach to investment is forward-thinking. To help protect the returns of the next generations, we include consideration of environmental, social and governance factors in the selection of our stock pickers who in turn include these factors in their investment processes. We place particular emphasis on engaging with companies to drive change in harmful business practices that may threaten long-term corporate profitability.

Rising dividend

We're proud of our 57-year track record of dividend growth, which is one of the longest in the investment trust industry.

Strategic Report

OUR PERFORMANCE

FINANCIAL HIGHLIGHTS

AS AT 31 DECEMBER 2023

The above data is as at 31 December 2023.

1. Alternative Performance Measure - see page 102 for further information.
2. Total dividend rounded to one decimal place.

Notes:

NAV per share including income with debt at fair value.

NAV Total Return based on NAV including income with debt at fair value and after all costs.

Source: Morningstar and Juniper.

OUR PERFORMANCE

LONGER-TERM

PERFORMANCE

1. Alternative Performance Measure (see page 102 for further information).

* Includes performance prior to WTW's appointment as investment manager on 1 April 2017.

Strategic Report

1. Introduction

1. Our Performance

1. Longer-TermPerformance

1. Chair's Statement

1. Investment Manager's Report z Our Stock Pickers
   z Investment Portfolio z Dividend
   z Ongoing Charges & Discount z How We Manage Our Risks

Directors' Report

Independent Auditor's Report

Financial Statements

Other Information

Strategic Report

CHAIR'S STATEMENT

CHAIR'S STATEMENT

It is with pleasure that I present the Annual Report for the year ended 31 December 2023, my first report as Chair."

Dean Buckley

Chair

Strategic Report

1. Introduction

1. Our Performance

1. Longer-TermPerformance

1. Chair's Statement

2023: A GOOD YEAR FOR SHAREHOLDERS

2023 was a surprisingly positive year for financial markets, with global equities delivering strong gains despite a challenging economic and geopolitical backdrop. I am pleased to report that our Net Asset Value ('NAV') Total Return of

21.6% was significantly higher than the 15.3% return from our benchmark, the MSCI All Country World Index ('MSCI ACWI'). It also compared favourably with the average returns of our two peer groups, 16.3% for the Association of Investment Companies ('AIC') Global Sector investment trust peer group and 12.7% for the Morningstar universe of UK retail global equity funds (open-ended and closed-ended). By design, this outperformance was largely due to good stock picking, rather than the result of any significant style, country, or sector biases. The slight widening of the Company's discount, from 4.2% at the start of the year to 5.4% at the end, led to a marginally lower Total Shareholder Return ('TSR') of 20.2%.

DIVIDEND INCREASED FOR 57TH

CONSECUTIVE YEAR

The Board declared a fourth interim dividend of 6.34p on

20 February 2024. As a result, the dividend for the full year increased by 5.0% from the prior year to 25.2p per share (2023: 24.0p). This year's dividend increase marks the 57th consecutive annual increase, a track record which is one of the longest in the investment trust industry, and one which the Board is confident can be extended well into the future.

RESILIENT PERFORMANCE TRACK RECORD

It was, therefore, a good year for our shareholders, one that built on the solid foundations laid in prior years and, through the continued strong compounding of returns, boosted longer term performance metrics. Given our style-balanced approach, the Board is pleased to see the Company's investment strategy working as intended, avoiding dramatic swings of performance relative to benchmark and growth or value biased strategies, and delivering resilient returns through a range of market environments. These environments included Brexit, Covid, the war in Ukraine, surging interest rates to contain inflation and escalating tensions in the Middle East. At year-end, our performance was in the top quarter of the Morningstar peer group of global trusts and funds over one, three, and five years.

THREE AWARDS

It is also encouraging to see that the turnaround since the introduction of the multi-manager strategy in 2017 has been recognised externally. We won three awards in 2023: the Global category of the 25th Investment Company of the Year Awards run by Investment Week, in association with the AIC; Best Marketing Campaign in the AIC's Shareholder Communications Awards; and Most Effective Brand Strategy Small Company in the Awards for Marketing Effectiveness organised by the Financial Services Forum. These awards raised our profile and may help us attract the attention of new investors, which benefits existing shareholders if it leads to increased demand for our shares and a higher share price. Our marketing efforts will continue in 2024 with the launch of a refreshed brand.

DEBT COSTS LOWERED

Like homeowners with variable rate mortgages, we were disappointed by the increase in the cost of servicing our floating- rate debt. After a thorough review of our debt arrangements, we replaced a meaningful proportion of those facilities with fixed rate loans at attractive rates. Full details on the refinancing of the Company's debt can be found on page 52. Willis Towers Watson ('WTW'), our investment manager, is confident that using borrowed money to buy attractive stocks will, in the long run, produce returns that exceed borrowing costs. Hence, our continued faith in the strategic use of gearing, although on a tactical basis WTW used gearing sparingly in 2023 given its caution about the near-term economic and market outlook. You can read more about WTW's market outlook in its report.

DISCOUNT REMAINED STABLE

The widening of investment trust discounts was much discussed in 2023. At its worst point, the average trust's shares traded at a discount of 16.9%. This was a wider discount to the value of the industry's underlying assets than at any time since the 2008 Global Financial Crisis. In part, this reflected weak investor sentiment and increased competition from attractive savings rates on deposit accounts. However, the Company fared better than most, with its average discount remaining relatively stable throughout the year

at 6.0% (2022: 5.9%). This compared favourably with the average discount for the AIC Global Sector of 9.8%.

It is always difficult to pinpoint the precise reasons for movements in the Company's discount because there are so many factors involved, not all of them within our control. We attribute our discount stability to good

investment performance and marketing, which stimulated demand for our shares, as well as the continued use of share buybacks. During the year, the Company bought back 8.6 million shares (2.9% of shares in issue as at

31 December 2022), versus 15.5 million in 2022. These share buybacks enhanced the NAV Total Return by 0.2%.

OPERATIONAL CHANGES SUCCESSFULLY IMPLEMENTED

As discussed in last year's Annual Report, we made some operational changes at the end of 2022, appointing Juniper Partners Limited ('Juniper') as company secretary and WTW to provide further marketing and distribution, public relations, and investor relations services. As previously detailed in

the Interim Report, with effect from 1 April 2023, Juniper was also appointed to provide administration, finance and accounting services. The Board is pleased to report that these changes have been operating successfully.

SUCCESSION PLANNING

As part of the Board's succession planning, Gregor Stewart stepped down at the end of December, having served a total of nine years, of which just over four were as Chair. I am honoured to replace him. On behalf of the Board, I would like to thank Gregor wholeheartedly for his enthusiasm and commitment as a Director and leadership as Chair. Gregor's tenure was through a demanding period which saw the simplification of the Company's business and implementation of the current investment strategy. Gregor left the Board

on a high note, with the Company delivering strong performance and receiving a handful of awards. As previously reported in the Interim Report, Anthony Brooke stepped down as a Director of the Company at the conclusion of the Annual General Meeting ('AGM') on 27 April 2023.

ANNUAL GENERAL MEETING

The Board looks forward to being able to meet shareholders again at this year's AGM, which will be held at the Apex Hotel in Dundee on 25 April 2024. 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 pickers, as well as members of WTW's 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.

KEEP UP TO DATE WITH COMPANY INFORMATION

The Company's website contains a vast amount of information such as details of shareholder meetings and investor forums, monthly factsheets, quarterly newsletters, and stock picker updates, as well as the Annual and Interim Reports. I would encourage you to visit the website to keep up to date on the performance of the Company. The QR code at the foot of 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 e-mail.

As always, the Board welcomes communication from shareholders and I can be contacted through the company secretary at investor@alliancetrust.co.uk.

OUTLOOK

Although inflation appears to have peaked and the next move in interest rates is likely to be down, the timing and pace of the expected easing of monetary policy by central banks is not clear. Cuts in interest rates may not arrive as soon or as quickly as the market expected towards the end of last year. As a result, the outlook for corporate earnings might not be as rosy as implied by some elevated stock prices. A soft landing, where economic growth shifts down to a lower gear but avoids global recession, is possible, but is not guaranteed. Nevertheless, every market environment produces winners and losers, and we are confident that our diversified but highly selective approach to stock picking will continue to add value for shareholders. Alliance Trust's innovative multi-manager investment strategy has already demonstrated strong performance through a variety of market conditions and the Board believes it can continue to build on that track record in the coming years.

Dean Buckley

Chair

6 March 2024

Scan the QR code using your smart phone's camera to access shareholder information on the Company's website.

1. Investment Manager's Report z Our Stock Pickers
   z Investment Portfolio z Dividend
   z Ongoing Charges & Discount z How We Manage Our Risks

Directors' Report

Independent Auditor's Report

Financial Statements

Other Information

Strategic Report

INVESTMENT MANAGER'S REPORT

INVESTMENT MANAGER'S REPORT

Strategic Report

1. Introduction

1. Our Performance

1. Longer-TermPerformance z Chair's Statement

1. Investment Manager's Report

STRONG INVESTMENT PERFORMANCE AGAINST A CHALLENGING MARKET BACKDROP

2023 could hardly have started with a less favourable backdrop. After 2022's market rout, equities were surrounded by uncertainty fuelled by rising interest rates, sticky inflation, and geopolitical conflict. It was therefore a surprise that stock markets generally performed so well. Indeed, on Wall Street many stocks ended the year at or near record highs. But it was a roller-coaster ride through the year, with markets suffering extreme mood swings from optimism and pessimism and back. A large proportion of the market's gains were made in the final quarter of 2023 after the US Federal Reserve signalled that interest rates could come down if inflation continued to decline.

The "Santa rally" from late October meant that the Company's benchmark index, the MSCI ACWI, which includes developed and emerging markets, delivered a total return (with dividends reinvested) of 15.3% for the year. The overall pattern of market returns was broadly speaking the reverse of 2022, with US mega-cap,tech-related stocks leading the way after the previous year's sell off. The so called "Magnificent Seven" - Nvidia, Microsoft, Tesla, Apple, Amazon, Meta and Alphabet - were responsible for over 50% of the MSCI ACWI's gains. Some of these advances were fuelled by excitement over the potential impact of Artificial Intelligence ('AI') on their future profits. However, in some cases at least, share price advances were underpinned by strong current earnings. During Covid, the share prices of many of the "Magnificent Seven" were fuelled largely by bullish sentiment; today, business fundamentals count, too.

There was more to the equity rally than US tech-related stocks, especially towards the end of 2023 when the rally broadened out. After decades of stagnation, the Japanese economy and stock market finally showed signs of life, with the Nikkei 225 index rising by more than 30%. However, depreciation of the yen trimmed the value of share price gains in sterling by half. Continental Europe and some emerging markets also posted strong gains for the year, though not China which failed to rebound after the lifting of Covid restrictions and had negative returns. The UK continued to lag the US and continental Europe, with the FTSE All-Share index returning 7.9%.

With relatively high interest rates ending the era of "free money", it is possible that the greater breadth of market returns in 2023 showed that investors were focussing on company specifics to identity potential winners and losers.

The Company's portfolio significantly outperformed the market in 2023, delivering a NAV Total Return of 21.6%, versus 15.3% for the index. Importantly, this outperformance was primarily driven, as intended, by our blend of stock pickers choosing a wide range of outperforming stocks from across the world, rather than country, sector or investment style exposures, although relative returns also benefitted from gearing and share buybacks. The table below shows the full breakdown of returns. We believe our managers' stock picking skills could become increasingly important in what is likely to be a period of continuing macroeconomic instability.

CONTRIBUTION ANALYSIS

Source: Performance and attribution data sourced from WTW, Juniper, MSCI, FactSet and Morningstar as at 31 December 2023. Percentages may not add due to rounding.

REAPING THE BENEFITS OF COMPOUNDING

As long-term investors, one strong calendar year's performance is not the best way to judge the success of our investment strategy. We prefer to focus on the impact of compounding of returns over time. It is, therefore, reassuring to see that last year's gains versus benchmark have incrementally built on steady past performance to deliver outperformance of the benchmark in all key time periods.

For the three years ended 31 December 2023, the cumulative NAV Total Return was 33.9% with relatively low volatility, versus 26.8% for the MSCI ACWI (see chart below). On an annualised basis, this equates to a NAV Total Return of 10.2% per annum, compared to 8.2% for the benchmark. Over five years and the period since we were appointed (1 April 2017 to 31 December 2023), the portfolio has delivered an annualised outperformance of 0.6% and 0.5% respectively. While this level of outperformance is less than we aspire to in the long run, it compares favourably with returns from most active managers and passive fund equivalents, after costs.

ATTRACTIVE RETURNS WITH LOW VOLATILITY*

Source: Morningstar.

* Comparison versus AIC Global Sector peer group - 3 years to 31 December 2023.

STOCK PICKER ALLOCATIONS

As in previous years, we kept all our so called "factor" positions well balanced relative to the benchmark in

2023 through regular small adjustments to stock picker allocations, allowing stock selection to shine through as the key source of return. However, we did add a Japan specialist, Dalton Investments ('Dalton') in July, which was discussed in detail in the Interim Report. Excluding Dalton, the table on page 15 which details stock picker weights

at the beginning and end of the year shows little change. But this disguises the fact that, to keep pace with shifting market dynamics, from one factor to another, we regularly take money away from the best performing stock pickers and give it to those who are underperforming. It may seem counterintuitive to trim exposure to "winners" and increase exposure to "losers" but this process helps to keep portfolio exposures balanced across sectors, countries, and styles, thereby avoiding the build-up of excessive concentration risks that can result from leaving allocations unchanged. The idea is to ensure that stock selection based on business fundamentals makes the key difference to returns, not over or underweight sector or country exposures, which can be subject to sentiment-based mood swings.

However, this rebalancing process is not automatic. Although we have target weights for each stock picker, changing allocations is ultimately a judgment call. For example, we did not add to Jupiter Asset Management ('Jupiter') or Lyrical Asset Management ('Lyrical') last year, despite their underperformance, as they often invest in smaller companies that are inherently riskier than the stocks typically chosen by of some of the other stock pickers, such as Veritas Asset Management ('Veritas'), who tend to focus on large, higher-quality value, companies.

SKILLED STOCK SELECTION DROVE RETURNS

The strategy clearly worked. Most of our stock pickers outperformed the MSCI ACWI, with the outperformers having a variety of investment styles and exposures. Vulcan Value Partners ('Vulcan'), which buys high quality stocks when their share price drop below estimated long term value, was the biggest contributor to the portfolio's outperformance. Vulcan's concentrated selection of stocks rose collectively by almost 50%. Its most successful holdings included two of the "Magnificent Seven", Microsoft and Amazon, but Vulcan's top five contributors also included the industrial conglomerate General Electric and the private equity group KKR, whose share prices rose by 85% and 70% respectively.

1. Our Stock Pickers

1. Investment Portfolio z Dividend
   z Ongoing Charges & Discount z How We Manage Our Risks

Directors' Report

Independent Auditor's Report

Financial Statements

Other Information

Strategic Report

INVESTMENT MANAGER'S REPORT

INVESTMENT MANAGER'S REPORT

Strategic Report

1. Introduction

1. Our Performance

1. Longer-TermPerformance z Chair's Statement

1. Investment Manager's Report

Veritas and Sustainable Growth Advisors ('SGA'), both of which focus on high quality growth stocks, were close behind Vulcan, along with growth-style specialist Sands Capital ('Sands'), and Metropolis Capital ('Metropolis'), which has a value-based investment philosophy. Veritas and SGA both benefitted from owning Amazon and Alphabet, but, as with Vulcan, not all their top contributors were US tech- related businesses. Veritas' largest contributors to portfolio outperformance included Safran, the French aerospace and defence company, and Aena, the Spanish industrial group; SGA's contribution was topped by MercardoLibre, Latin America's answer to eBay. Sands was actually the strongest performer of all the managers in absolute terms but its

low weight in the portfolio, means that it did not contribute as much to the portfolio's outperformance as the others. Sands' biggest individual contributor was the US software company ServiceNow and Metropolis' was Alphabet.

At the other end of the spectrum, the holdings in aggregate of Black Creek Investment Management ('Black Creek') and Jupiter failed to keep up with the market, but both picked some notable individual winners, as did GQG Partners ('GQG') whose overall return was market- like in 2023. For example, Black Creek's investment in Ebara, the Japanese industrial equipment manufacturer, returned 60% and was among the biggest individual contributors to portfolio performance. Jupiter's holdings in Kyndryl, the US technology infrastructure business spun out of IBM in 2021, posted a gain of 76% and GQG's investment in Petrobras, the Brazilian state-owned oil and natural gas major, delivered a return of almost 80%.

DIVERSE RANGE OF STOCKS OUTPERFORMED

Looking at the portfolio as a whole, it is clear that selective exposure to the "Magnificent Seven" stocks was a significant driver of portfolio returns last year. But it is important to point out that we had no exposure to Tesla, had a relatively low weight in Apple and a below benchmark weight in Nvidia early in the year when the stock soared, which detracted from relative performance. This demonstrates a selective approach to the "Magnificent Seven" by our stock pickers based on their assessment of business fundamentals,

as opposed to treating them as a homogenous entity. Such was the rally among the "Magnificent Seven" that they accounted for approximately 30% of the S&P 500 at the year end, or the same as the market capitalisation

of Japan, Canada and the UK combined1. This represents enormous concentration risk in the benchmark which we are keen to mitigate, via active management.

Unlike the index, our returns were not reliant on a cluster of dominant players. Indeed, in aggregate, a greater proportion of our gains came from relatively small incremental contributions from diversified exposure to a wide variety of stocks in different industries. You can see from the below pie charts that 53% of the benchmark's return came from the "Magnificent Seven". However, they accounted for only 34% of the portfolio's return.

Portfolio return stock contributors

• 34% from the "Magnificent Seven"

Alphabet 9%

Amazon 8%

Apple 0%

Meta 3%

Microsoft 9%

NVIDIA 4%

Tesla 0%

Rest of stocks 66%

Source: FactSet, MSCI Inc, Juniper and WTW. Data as at 31 December 2023.

Note: Total percentages may not add up to 100 due to rounding dierences.

Benchmark return stock contributors

• 53% from the "Magnificent Seven"

Alphabet 6%

Amazon 7%

Apple 10%

Meta 6%

Microsoft 10%

NVIDIA 10%

Tesla 4%

Rest of stocks 47%

Source: FactSet, MSCI Inc, Juniper and WTW. Data as at 31 December 2023.

Note: Total percentages may not add up to 100 due to rounding dierences.

Our stock pickers are not complacent about the ability of "big tech" companies to continue to dominate the market, hence continued exposure to Amazon, Microsoft, and Alphabet, which are all in the portfolio's top ten positions. However, our stock pickers remain wary of AI hype. As with the internet bubble 20 years ago and other innovative technologies like cloud computing, it could take several years before the clear winners of AI emerge, and they will not necessarily be the early front runners. So, while the portfolio does have exposure to AI, through Microsoft and a small position in Nvidia, for example, our stock pickers seek to profit from AI on a company-by-company basis, rather than treating AI as a broad theme. Having been through a euphoric period in which it was obligatory for every tech company to develop an AI strategy, it is now approaching the time when investors are likely to begin demanding real revenue and profits

from the technology. Active management of exposures to AI, including within mega caps, will therefore be key.

STOCK PICKERS' ADJUSTED HOLDINGS

Apart from regular rebalancing between selected stock pickers and the addition of Dalton, there were no major changes to our portfolio positioning in 2023. However, the stock pickers themselves adjusted their holdings. This could have happened for a variety of reasons. For example, stocks reaching their estimate of fair value and profits being taken, companies failing to live up to expectations and positions being sold, or cheap stocks being bought because their share prices have fallen well below fair value.

Examples of position changes in 2023 included:

• Black Creek sold out of Germany's Heidelberg Materials following significant share price appreciation and reinvested profits in US listed Elanco Animal Health, which produces medicines and vaccines that help prevent and treat disease in livestock and pets. Elanco trades at an attractive valuation, particularly when compared to its larger peer, Zoetis. Black Creek believes that Elanco can accelerate sales growth and increase its profitability in the coming years based on new product launches and improved operating efficiencies.

• Lyrical sold Lincoln Financial after it surprised investors by writing down the value of some of its assets and bought shares in Gen Digital, a global consumer, cyber safety provider based in the US. Cyber safety was synonymous with computer anti-virus software, but as people spend more of their lives online across many devices, threats have expanded beyond computer viruses. The ever-increasing volume and sophistication of online threats drives long term organic growth potential for the company.
• Veritas sold CVS Health due to growing doubts about its business model and established a position in Diageo, the UK based drinks company that has built an industry leading portfolio of brands through focused investment, and, in many countries, a dedicated route to market. Diageo can influence the evolution of luxury spirits across different categories and occasions, including super premium scotch and tequila. It is also growing brands of the future, including zero and lower alcohol choices through a combination of acquisition, developing their own brands, and investing in entrepreneurs through the Diageo backed accelerator programme. This high-quality exposure to a multi decade theme of premiumisation of developed market consumption makes the investment in Diageo very attractive.
• SGA bought shares in Aon, a commercial insurance broker that helps clients better manage risk, employee retirement, and health benefits. Aon monetises its insights, mainly through highly recurring commissions and fees, which provide predictable cash flows. The company has also been taking on higher margin businesses which are enabled by analytics and has been successful delivering consistent revenue growth and margin expansion over the years. SGA expects overall steady growth based on rising premiums in risk, health, and increases in retirement assets over a three-to-five-year investment horizon.

1. Our Stock Pickers

1. Investment Portfolio z Dividend
   z Ongoing Charges & Discount z How We Manage Our Risks

Directors' Report

Independent Auditor's Report

Financial Statements

Other Information

Strategic Report

INVESTMENT MANAGER'S REPORT

INVESTMENT MANAGER'S REPORT

RESPONSIBLE

INVESTMENT

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1. Introduction

1. Our Performance

1. Longer-TermPerformance z Chair's Statement
   z Investment Manager's Report z Our Stock Pickers

• Sands sold Edward Lifesciences following a weakening of its conviction in the company and bought shares in Roper Technologies, a diversified industrial technology company that operates over 40 businesses in more than 40 niche markets. The company sells software and engineered products and solutions across four segments: application software, network software and systems, measurement and analytical solutions, and process technologies. The corporate strategy prioritises cash flow growth, which Roper then seeks to deploy into acquiring new businesses. Roper maintains strict investment criteria when evaluating acquisition targets, and its rigorous standards are based on its proprietary "cash return on investment" metric. The company is indiscriminate in the types of businesses it seeks to own; rather, it focuses exclusively on free cash generation and management quality. Each business is decentralised and operates autonomously, with a mandate to grow and generate cash. Sands' research suggests that Roper is an acquirer of choice for engaged management teams that desire to continue independent operations. It expects steady cash flow growth as Roper executes on its disciplined acquisition and growth strategy.

Overall, total stock turnover was 43.0% of the portfolio in 2023, down from 56.7% in 2022.

UNCERTAIN OUTLOOK

Although the year ended on a high note for stock markets, it is not easy to predict how they will evolve in 2024. Most economists and analysts were wrong footed by the global economy in 2023, which highlights the difficulty of basing an investment strategy on macroeconomic developments. That is why WTW places limited emphasis on second guessing the speed of global Gross Domestic Product ('GDP') growth, or which country will be up or down, and instead we leave it to our managers to decide if and how macroeconomic conditions impact their choice of holdings.

Even so, the macroeconomic outlook does influence the level of gearing that we set and manager allocations. In a world where geopolitics is back on the investment agenda and there are multiple elections on the horizon, including in the US, India, the European Parliament, and the UK, the short- term outlook for equities is more than usually uncertain.

We are conscious that the full impact of past interest rate increases has yet to fully filter through to the real economy, for example, on debt refinancing by households and corporations. It is possible, therefore, that recession may just have been postponed rather than avoided if people pull in their horns. Although hoped for interest rate reductions may limit the damage of a downturn on companies' earnings, a soft landing is not assured. Even if recession is avoided, growth could remain sluggish. Finally, notwithstanding any future reductions, with interest rates back to a more normal level historically, there could be continued competition for equities from the perceived safety of bonds and cash. We therefore remain cautious and are keeping the portfolio's net gearing low.

We are, however, excited about the prospects for active management and the companies in the portfolio. Macroeconomic and market volatility typically leads to higher differentiation of valuations between stocks, which skilled stock pickers can exploit for long term advantage. In 2023, our fund managers demonstrated that, collectively, they can add significant value despite a challenging macroeconomic backdrop. We remain confident that they can continue to do well by selectively investing in companies with strong fundamentals rather than following short-term trends that often drive indices. We, in turn, will continue to dynamically manage the stock pickers and their allocations in the light of evolving market conditions to ensure the portfolio strikes a comfortable balance between reward and risk. They will seek the rewards; we will manage risk.

As stewards of the Company's assets, we apply high standards of responsible investment to managing the portfolio. Environmental, Social and Governance ('ESG') factors can all influence returns, so these risk factors are integrated into WTW's investment processes, including assessing how managers evaluate ESG risk in their decisions over what stocks to purchase. Climate change poses significant risks to investment returns from many companies, which is why both we and the Company have pledged to have its assets transitioned to achieve Net Zero by 2050 at the latest, with an interim target of reducing portfolio emissions by 50% by 2030, relative to 2019.

There was a reduction last year in the portfolio's weighted average carbon intensity (which measures carbon emissions as a proportion of revenue) to 74.5 tCO2e/$M Sales from 117 tCO2e/$M Sales in 2022. However, progress towards Net Zero will not be linear. Emissions from the portfolio are dependent on holdings, which can change from year to year as our stock pickers seek value for investors. Even so, the direction of travel is clearly set out and if companies are perceived as being slow to adapt to a Net Zero world, we will generally vote against or engage with them to encourage positive changes to business practices. We believe this is preferable to excluding them 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. As well as engaging with companies on climate change, our stock pickers, together with stewardship provider EOS at Federated Hermes ('EOS'), focused on a wide range of other issues last year. These engagements included:

• Dalton seeking to rationalise the structure of Japan based Seven & I, which operates a wide variety of businesses, including convenience stores, superstores, food services and financial services. In an ongoing engagement, Dalton is urging the company to spin off its 7 Eleven global convenience store business to enhance corporate value.
• SGA engaging with Yum! Brands (owner of KFC, Pizza Hut, and Taco Bell) to improve labour, health and safety, environmental performance and ethics within its protein supply chains.
• Veritas challenging Meta by voting against management for the business to report on online child exploitation to provide shareholders more information about how well the company is managing these risks.

Overall, EOS and our stock pickers engaged with 95 companies in the portfolio on 539 issues and objectives throughout the year. Of these, the environmental category accounted for 28% of the total. Meanwhile, our stock pickers voted on all available proposals, casting votes at 3,522 resolutions. Of these resolutions, they voted against company management on 410 and abstained from voting on 53 occasions. The topics and the breakdown of the ways in which our stock pickers voted are detailed below.

HOW WE VOTED

Number of votes with management 86.9%

Number of votes against management 11.6%

Number of votes abstained 1.5%

Source: WTW and EOS at Federated Hermes. Data as at 31st December 2023.

Note: Total percentages may not add up to 100 due to rounding di erences.

REASONS FOR VOTING AGAINST MANAGEMENT

Audit Related 0.5%

Capitalisation 4.9%

Company Articles 0.7%

Compensation 20.2%

Corporate Governance 1.2%

Director Election 35.1%

Director Related 4.9%

E&S Blended 0.5%

Environmental 7.8%

Miscellaneous 0.2%

Non-Routine Business 10.5%

Routine Business 2.4%

Social 10.2%

Strategic Transactions 0.5%

Takeover Related 0.2%

Source: WTW and EOS at Federated Hermes. Data as at 31st December 2023.

Note: Total percentages may not add up to 100 due to rounding dierences.

1. Investment Portfolio

1. Dividend

1. Ongoing Charges & Discount z How We Manage Our Risks

Directors' Report

Independent Auditor's Report

Financial Statements

Other Information

INVESTMENT MANAGER'S REPORT

OUR

STOCK PICKERS

OUR STOCK PICKERS

Strategic Report

1. Introduction

1. Our Performance

1. Longer-TermPerformance z Chair's Statement
   z Investment Manager's Report

1. Our Stock Pickers

HOW WE MANAGE THE COMPANY'S PORTFOLIO

WTW has overall responsibility for managing the Company's portfolio. It's our 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'. We then allocate capital to them, relative to the risks they represent. For example, small-cap stocks are typically more risky than large-cap stocks, so 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; we keep them under constant review and vary them over time according to market conditions, with the goal of keeping our exposures to different parts of global stocks markets well balanced.

We encourage our stock pickers to ignore the benchmark and only buy a small number of stocks in which they have strong conviction, while we manage risk through the stock picker allocations. On their own, each of the stock picker's high conviction mandates has the potential to perform well. This is supported by our experience of managing high conviction portfolios and academic evidence1. But concentrated selections of stocks can be volatile and risky, so we mitigate these dangers by blending stock pickers with complementary investment approaches 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 us since inception of the multi-manager strategy, though we do actively monitor and rearrange the line-up where necessary. There was one addition to the team in

2023. As previously detailed on page 9, in July we added a specialist Japan manager, Dalton. This was funded with capital from the other stock pickers, principally Black Creek, Metropolis, Sands, GQG and Veritas. Additional information on Dalton can be found on page 12 of the Interim Report for the six months ended 30 June 2023.

We invest a lot of time and effort on identifying skilled stock pickers for the Company's portfolio, undertaking extensive qualitative and quantitative analysis. This due diligence process focuses on:

• The investment processes, resources and decision-making that make up the stock picker's competitive advantage;
• The culture and alignment of the organisation that leads to sustainability of that competitive advantage;
• Their approach to responsible investment. We aim to appoint stock pickers who actively engage with the companies in which they invest and have an effective voting policy. When necessary, we challenge the stock pickers and guide them towards better practices; and
• The operational infrastructure that minimises risk from a compliance, regulatory and operational perspective.

Our views are formed over extended periods from multiple interactions with the managers, including regular meetings. We look beyond past performance numbers to try to understand their '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 are just a single data point, and, without the context of the additional information, they are unlikely to persuade us that a stock picker is skilled.

Once selected, we tend to form long-term partnerships with our stock pickers, generally only taking them out of the portfolio if something 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, short-term underperformance is to be expected and is not a reason to doubt a stock picker if they are adhering to their philosophy and process. We do, 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.

OUR STOCK PICKERS AS AT 31 DECEMBER 2023

1. Investment Portfolio z Dividend
   z Ongoing Charges & Discount z How We Manage Our Risks

Directors' Report

Independent Auditor's Report

Financial Statements

Other Information

1. Sebastian & Attaluri, Conviction in Equity Investing, The Journal of Portfolio Management, Summer 2014.

1. Mandate under review due to resignation of lead fund manager, Ben Whitmore.
2. Please note that AUM includes the discretionary and non-discretionary assets of Sands Capital Management, LLC as of 31/12/2023, and the gross assets of all funds (not including uncalled capital) for Sands Capital Ventures, LLC. Figures for Sands Capital Ventures, LLC are updated 45-60 days after quarter-end.

Strategic Report

INVESTMENT PORTFOLIO

OUR 30 LARGEST INVESTMENTS

AT 31 DECEMBER 2023

INVESTMENT PORTFOLIO

Strategic Report

1. Introduction

1. Our Performance

1. Longer-TermPerformance z Chair's Statement
   z Investment Manager's Report z Our Stock Pickers

1. Investment Portfolio

1. Dividend

1. Ongoing Charges & Discount z How We Manage Our Risks

Directors' Report

Independent Auditor's Report

Financial Statements

Alphabet

1

Microsoft

2

Amazon.com

3

Visa

4

Alphabet is a holding company that engages in the acquisition and operations of different firms. It is best known as the parent company for Google but holds other subsidiaries as well. The company, through its subsidiaries, provides web-based search, advertisements, maps, software applications, mobile operating systems, consumer content, enterprise solutions, commerce, and hardware product. Alphabet dominates the online search market, with Google's global share above 80%, via which it generates strong revenue growth and cash flow. It is one of the "Magnificent Seven" technology stocks in the United States.

Microsoft develops, manufactures, licenses, sells and supports software products including operating systems, server applications, business & consumer applications and software/development tools for the Internet and intranets. In addition, it develops video game consoles and digital music entertainment devices. Microsoft is an established player in the tech sector and continues to evolve and innovate to maintain this position. We see the potential for solid growth driven by a still significant opportunity for its Azure cloud- computing business and within its suite of office and productivity solutions. It is one of the "Magnificent Seven" technology stocks in the United States.

Amazon.com is a multinational technology company that focuses on e-commerce, online advertising, cloud computing, digital streaming, and artificial intelligence. The opportunity for Amazon's growth stems from the strength of and execution in its AWS cloud computing business, as well as its offerings that are in or support digital commerce. It is one of the "Magnificent Seven" technology stocks in the United States.

Visa is an American multinational financial services corporation. It describes itself as a global payments technology company that works to enable consumers, businesses, banks, and governments to use digital currency. It facilitates electronic funds transfers throughout the world, most commonly through Visa branded credit cards, debit cards and prepaid cards across a broad clientele from retail to corporate. The company is a dominant player within payment solutions and with cross-border travel volumes increasing, this could help sustain double-digit revenue growth for years to come.

Other Information

Strategic Report

INVESTMENT PORTFOLIO

OUR 30 LARGEST INVESTMENTS

AT 31 DECEMBER 2023

INVESTMENT PORTFOLIO

Strategic Report

1. Introduction

1. Our Performance

1. Longer-TermPerformance z Chair's Statement
   z Investment Manager's Report z Our Stock Pickers

1. Investment Portfolio

1. Dividend

1. Ongoing Charges & Discount z How We Manage Our Risks

Directors' Report

Independent Auditor's Report

Financial Statements

Nvidia

5

Mastercard

6

Petrobras

7

UnitedHealth Group

8

Nvidia, based in California, is a world-leading supplier of artificial intelligence hardware and software. The company designs products that include graphics processing units ('GPUs') and systems on a chip ('SoCs') for the mobile computing and automotive markets. It is one of the "Magnificent Seven" technology stocks in the United States.

Mastercard provides technological solutions and the enablement of electronic payments. It works with a wide range of consumers from individuals to corporations

to governments. Mastercard is a firm that has shown good stability and quality with its earnings, and holds one of the dominant positions amongst payment solutions providers.

Petroleo Brasileiro S.A. (Petrobras) explores for and produces oil and natural gas. The company refines, markets, trades, transports and supplies oil products. Petrobras operates oil tankers, distribution pipelines, marine, river and lake terminals, thermal power plants, fertiliser plants, and petrochemical units. Brazil houses the second largest oil reserves in South America, and this is where Petrobras operates and produces the majority of its oil and gas. Though majority owned by the Brazilian Government, the firm competes on the world stage as one of the largest producers of petroleum and petrochemicals.

UnitedHealth Group describes itself as a health and well-being company, offering health care coverage and benefits through UnitedHealthcare, and technology and data-enabled care delivery through Optum. It also manages organised health systems across the United States and provides employers products

and resources to plan and administer employee benefit programs. UnitedHealth Group is the largest health insurer in the world. Due to its size, stability, dividends, and positioning, it holds a dominant position in the largest healthcare industry in the world.

Other Information