Fund Research

Miton Global Opportunities

Last update 30 May 2018

Miton Global Opportunities aims to deliver returns in excess of sterling three-month LIBOR +2% by investing in other investment trusts that fund manager Nick Greenwood, who has almost 40 years’ experience in the sector, believes are trading on discounts that are wider than they should be.

The trust, which sits in the AIC’s Flexible Investment peer group, has little in common with its stablemates in this sector and has few comparable peers as a fund trust of investment trusts, particularly because of its unique focus on cash-plus returns. It is highly focused, with more than half of its assets held in the top ten holdings, and the investment process is very much driven by the expertise of the manager – although we understand that Miton is taking steps to put more resources behind the fund. Nick uses few quant screens or filters, barring a system which allows him to monitor investment trust NAVs in ‘real time’ – estimating the real NAV of a trust by looking at its underlying holdings and working out their value, rather than waiting for end-of-day NAV updates from the trust itself, or indicative NAVs which largely reflect the movements of the major index constituents in a trust’s given market.

The trust is focused wholly on capital growth and has outperformed the average trust in the AIC Flexible sector by a broad margin over five years. Since launch in 2004, it has delivered annualised NAV total returns of 7.8%. Performance comes in fits and starts, however, with very strong years coming between more modest bouts of performance – though the trajectory of returns has only been negative twice in the last ten years.

The trust was stuck on a significant discount of its own until recently, but after a major overhaul by the board – which introduced a number of new strategies to deal with it – the discount has narrowed sharply. A much greater retail presence on the shareholder register means the discount going forward looks set to be more volatile than it has been in the past, but this is also a major opportunity for the trust itself in Nick’s view.

He says the large volume of small trades going through platforms means opportunities arise far more frequently than they did in the past, and this, he believes, could prove to be a significant driver of returns going forward.

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