listed on the stock exchange Miton Global Opportunities An unusual investment fund at such levels.
Its portfolio includes an eclectic mix of investments with exposure to everything from German residential property to forestry and shipping – while its holdings are mainly in quoted investment trusts.
Although this is an investment oddball, this formula appears to work based on the latest performance figures.
Over the past year, the £100 million trust, whose shares can be traded on the London Stock Exchange, has given investors returns of 50 percent – 84 percent over five years.
Charlotte Cuthbertson, assistant manager of the fund, says, “The trust has changed in the last two to three years.
‘It is no longer a fund that primarily invests in investment trusts with investments in equities. Now it is about providing shareholders with a portfolio composed of a largely diversified mix of assets.
‘We are trying to find returns in different sectors of the investment world.’
The investment trusts are selected by Cuthbertson in collaboration with Lead Manager Nick Greenwood. Their main focus is on investment trusts that have assets of less than £500 million.
That’s because these smaller funds tend to have more value, says Cuthbertson, who are overlooked by big money managers like Hargreaves Lansdowne.
“There is a lot of potential in this area,” she adds. “We are talking about an option from more than 270 trusts.” The end result is a portfolio built around 45 holdings.
There are important points that managers look for before buying into an investment trust.
They have to prefer the asset class in which the fund is invested and the shares to represent the bargain. In other words, they must sit at a large — double digit — discount to the value of the underlying assets.
Then, they sit down to assess the possibilities of a ‘catalyst’ reducing this remission. If a trust ticks all these boxes, it is bought.
Some holdings go well very quickly. For example, the trust bought into the Biotech Growth Trust in late 2018 when stock markets around the world corrected.
“Biotech was not liked as an investment subject,” says Greenwood.
‘But of course, the pandemic hit early 2020 and suddenly the biotech stock was back in favor.’
The trust disposed of its stake in July last year, making a profit of around 80 per cent in the process.
Other bets take longer to turn good. For example, five years ago a holding was formed in VinCapital Vietnam Opportunity.
‘Vietnam, like India, is a stock market that we love,’ Cuthbertson says. The underlying economy is benefiting from a growing middle class and greater urbanization. It is also a beneficiary of inward investment as large multinational businesses seek to reduce their dependence on China.
Although the WinCapital Fund has performed strongly — its share price has risen nearly 40 percent over the past year — Cuthbertson and Greenwood won’t crystallize their gains until the fund’s discounts are reduced (it’s currently 23. on the percentage).
“If the discount is halved from here, we would like to reduce our stake,” says Cuthbertson. Our mission will be done.
Its major share in the thriving Indian stock market is through India Capital Growth, a trust that has delivered one-year returns of 76 per cent.
A narrow discount — from 14 percent to 8 percent — suggests that it may not take long for Miton to realize its gains.
The stock market identification number of the trust is 3436594 and its market ticker is MIGO. Overall annual fees are at a high of 1.3 percent.