CHIEF executive Katherine Garrett-Cox believes Alliance Trust's performance has proved to "naysayers" that the company is "heading in the right direction".

Dundee-based Alliance Trust posted a total return on net asset value of minus 5.7% for the 11 months to December 31.

This ranked it 10th out of 32 investment trusts in the global growth sector after tumultuous market conditions towards the end of the year.

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The results come less than a year since the trust beat off a rebellion by activist investor Laxey Partners.

Ms Garrett-Cox said: "We have in some senses proved to some of the naysayers we know what we are doing and all parts of the company are heading in the right direction."

Alliance Trust will pay a final dividend of 2.577p on April 2 to take pay-outs for the period to 9p, a 7.2% increase on 2010 and its 45th consecutive annual rise.

Ms Garrett-Cox sought to build two years worth of revenue reserves before boosting pay-outs significantly, aided by the hiring of a fixed income team from Scottish Widows and rising dividend payments from Asia.

The trust make three quarterly payments of 2.3175p with a final dividend of at least that.

Alliance Trust had reduced its equity exposure ahead of the market, Ms Garrett-Cox said, and also hedged exposure to the beleaguered euro.

Ms Garrett-Cox said the chances of Greece leaving the euro "is more likely than 12 months ago". "It is a growing concern for us," she added. "From our point of view we have seen about €1 trillion (£833m) pumped into the system since the end of last year. That is a pretty expensive way to make people feel good.

"It hasn't addressed the underlying problem which is highly-indebted nations that need to get their balance sheets in order."

She said that political risk will be high on the market agenda this year due to elections in France, Greece and the United States.

Last year, the trust saw off rebel Laxey Partners' attempt to commit it to buying back shares when the discount between the company's share price and its underlying portfolio widened to more than 10%.

But it has pursued a looser discount control mechanism, buying back 10% of its share capital over the period.

This added some 1.7% to its net asset value returns.

"I am not going to be apologetic about this," Ms Garrett-Cox said. "One of the things shareholders expect is for us to use every tool in the tool kit to generate returns."

Alliance Trust has been positioned relatively aggressively as markets bounced back, with 98% of net assets in equities.

Ms Garrett-Cox said: "We have had a degree of confidence in the current rallies. We do not expect it to last for much longer.

"We are looking for opportunities to hedge the portfolio."

Meanwhile, Max Ward's Independent Investment Trust reported it produced a 16% return, twice that of the FTSE All-Share, in the three months to February 29.