Buy into the “contrarian” appeal of US growth stocks

Investors should ignore the shift towards value stocks, says Max King, and stick with fast-growing American tech stocks. Here are two of the best investment trusts to buy.

Black sheep among white sheep
Go against the herd with Baillie Gifford
(Image credit: © Shutterstock)

“The central principle of investment,” said John Maynard Keynes, a highly successful fund manager as well as an economist, “is to go contrary to the general opinion, on the grounds that if everyone agreed about its merit, the investment is inevitably too dear and therefore unattractive.” In October, the contrarian trade was to switch out of the technology stocks that had outperformed in the pandemic and buy lockdown-hit value stocks. The announcement of vaccines in November duly led to a dramatic rebound in value stocks as an end to restrictions was factored in. The consensus view has now turned in favour of value over growth and against the tech-heavy US market.

Another good year for growth stocks?

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Max King
Investment Writer

Max has an Economics degree from the University of Cambridge and is a chartered accountant. He worked at Investec Asset Management for 12 years, managing multi-asset funds investing in internally and externally managed funds, including investment trusts. This included a fund of investment trusts which grew to £120m+. Max has managed ten investment trusts (winning many awards) and sat on the boards of three trusts – two directorships are still active.

After 39 years in financial services, including 30 as a professional fund manager, Max took semi-retirement in 2017. Max has been a MoneyWeek columnist since 2016 writing about investment funds and more generally on markets online, plus occasional opinion pieces. He also writes for the Investment Trust Handbook each year and has contributed to The Daily Telegraph and other publications. See here for details of current investments held by Max.