Much-criticised Dundee-based Alliance Trust was yesterday added to the "buy" lists of two influential analysts as they backed its cautious approach and the strategy of new chief executive Katherine Garrett-Cox.

Alan Brierley of Collins Stewart and Simon Elliot at Winterflood Securities are recommending the stock as a defensive home for investors' cash during the current market turmoil, but other Scottish-run trusts have fallen out of favour.

The FTSE-100 company, which runs £2.5bn of assets, has faced intense criticism in recent years as previous chief Alan Harden's focus on new investment areas such as property and private equity and the spin-out of investment companies coincided with a period of poor performance.

But the appointment of Garrett-Cox to the top job in August, with a commitment to boosting performance of the company's core portfolios of shares, has sparked fresh interest in the company, as has an astute decision to cash in some equities before the recent market dips.

Brierley has tipped the stock, as he recommended a highly risk-averse strategy with a focus on preserving capital rather than generating big returns.

He said: "The historic performance record of Alliance Trust has been lacklustre. At times in the past couple of years, there seems to have been too much focus on peripheral activities."

But he added: "Crucially, we have already begun to see an improvement in performance in recent months. A decision to reduce equity exposure in May and then again in August has helped to preserve capital."

The 120-year-old trust now has just 75% of its portfolio invested in equities as managers looked for safer investments.

Brierley said that since May the total return on net asset value, which measures the performance of the trust's underlying portfolio, is 4.7% ahead of its peers, ranking it in the top quartile of its global growth peer group.

"At this time, we like the lower-risk approach and would expect the company to extend this period of relative outperformance," he said.

Elliot, head of investment trust research at Winterflood Securities, said he had replaced Bankers Trust, run by Henderson Global Investors, with Alliance Trust on his "buy" list.

He said: "The business review announced at the time of (Garrett-Cox's) appointment in August is still ongoing but it is clear there will be a step change in the future direction of the fund."

He added: "Given its conservative investment approach, Alliance Trust, in our opinion, is well placed to outperform its peers in difficult market conditions."

He added that with Alliance Trust shares currently trading at 19% below the value of the underlying portfolio, it could benefit from a re-rating if its performance continues to improve.

There are also hopes among some analysts that Alliance Trust might buy back some of its own shares to narrow the discount.

Among the stocks being tipped as a "sell" by Brierley is British Assets Trust, whose £432m of assets are run by Julie Dent out of fund manager F&C's Edinburgh office.

"Indifferent stock selection has been a feature over recent years and matters have taken a turn for the worse this year with the company 8% behind its benchmark," he said.

"It is now nearly two years since the board acknowledged the poor stock selection and since that time matters have got worse. The company has entered the last chance saloon."

Also on his sell list is Murray International, run by Aberdeen Asset Management's Bruce Stout, due to the high price for the shares and its exposure to emerging markets. Aberdeen's Murray Income and Dunedin Income Growth, along with Standard Life Equity Income, were highlighted as "expensive".

Scottish American, run by Patrick Edwardson of Baillie Gifford, is also a "sell" following a poor year.

The trust, known as Saints, appointed former Bank of England deputy governor Rachel Lomax to its board on October 1.