Alliance Trust: is this global fund worth investing in?

Alliance Trust was the best performer in its sector in 2023 and remains a promising pick.

Alliance Trust
(Image credit: Alliance Trust)

Rarely can the aphorism “pessimists sound smart, optimists make money” have been truer than in 2023. The Eeyores came into the year insisting that rising interest rates would cause a recession in the developed world, corporate profits would be hit, stockmarkets would slump and the only safe haven would be in government bonds. Yet recession was averted, earnings dipped but returned to growth, equities, especially in the US, performed well and government bond yields continued to rise (reflecting falling prices).

The pessimists argue that most of the market’s gain was attributable to the “Magnificent Seven” stocks at the top of the US market (eight if you include Netflix), which make up 28% of the S&P 500 and jointly rose by 80%. This is, they believe, an unsustainable bubble that will pop when the recession, at last, materialises in 2024. Cue market mayhem and happy pessimists. Pessimists spend too much time telling investors why they are all wrong and not enough listening to what the market is telling them. Markets do occasionally charge off in the wrong direction, but not nearly as often as “expert” forecasters.

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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.