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Alliance Trust: the case for stockpicking

Craig Baker tells Dave Baxter why active stockpicking can reap rewards
Alliance Trust: the case for stockpicking
  • Alliance Trust seeks to outperform by backing a selection of the best stockpickers
  • How the trust has performed and differs from MSCI ACWI and other global equity funds

Are the bulk of returns driven by asset allocation? This question has dogged many investors over time and multiple studies suggest that this is the case. However, the execution of any asset allocation calls can still make a major difference to overall performance. In the US, the S&P 500 index may have gained 96 per cent over the five years to 23 November in sterling terms, but stockpickers have had massively different fortunes. The best-performing fund in the Investment Association (IA) North America sector over that period was Baillie Gifford American (GB0006061963) with a sterling return of more than 350 per cent. The worst performer delivered less than 40 per cent.

This sheer dispersion may explain why some investors maintain that there is a case for active stockpicking. Craig Baker, global chief investment officer at Willis Towers Watson, the firm that manages Alliance Trust's (ATST) portfolio, is among them.

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