Fund Profile

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by MIGO Opportunities. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
MIGO’s managers say there are too many great opportunities to fit them all in the portfolio…
Overview

MIGO Opportunities (MIGO) is designed to exploit the broad range of opportunities in the closed-ended fund universe, which boasts a huge range of specialised strategies with strong NAV stories as well as technical opportunities that often show up via wide discounts.

Managers Nick Greenwood and Charlotte Cuthbertson look predominantly for funds trading on a wide discount to NAV, where they see a clear catalyst to that discount closing. They will at times also buy portfolios trading on narrower discounts if the NAV story is particularly strong and under-appreciated. However, currently, the main theme in the portfolio is deep discounts, with the sector exceptionally cheap versus history—it has only really been cheaper in the immediate aftermath of the 2007/2008 great financial crisis.

The largest ten holdings are trading on an average discount of 32% (see Portfolio section). This would imply a 47% average return should they all return to trading at par, before considering any NAV gains. It is worth stressing real life is likely to be messier than this, and not all positions will be held until the discount closes, so this is no type of return projection, but simply an illustration of the extreme valuation opportunity out there, which Nick and Charlotte tell us makes them feel like “kids in a sweet shop”. They have a small net gearing position for the first time in years as a result of the number of opportunities they are finding.

MIGO’s shares, themselves, trade at a Discount of 2.4% at the time of writing. The board has a vigorous buyback programme which has kept the discount close to NAV in recent years. MIGO is now managed by AVI rather than Premier Miton, although the management team and investment process have remained identical (see Management).

Analyst's View

There are two reasons we think this is likely to prove a great long-term entry point into the investment trust sector as a whole. First, the likelihood that interest rates have peaked in the US and UK means that pressure has been relieved on the valuation of equities, listed and unlisted, while investors are likely to be looking to put cash to work rather than building up more. Secondly, wide discounts across the sector and the consensus that rates are not going to be cut fast are leading boards to cut to the chase and use all the levers they have to unlock value. Wind-ups, mergers, and tender offers are a regular occurrence, and the cheapness of the investment trust sector has encouraged value-seekers and activists to get involved, including prominent US hedge fund managers.

All this plays into the hands of Nick and Charlotte, who tell us their main problem at the moment is choosing between the huge number of attractive opportunities. MIGO offers a good way for investors to access a broad range of trusts across the space in sectors it would be hard to research individually for a non-specialist. This is all Nick and Charlotte do, however, and so they have the time and experience to get into the weeds with all the idiosyncratic investment companies on the London market. We think it could easily complement a portfolio with a more conventional asset allocation or serve as a one-stop shop for access to the deep discount stories in the sector for those investors with little investment trust exposure already.

Bull

  • Exceptionally wide discounts across the sector have created a rare opportunity
  • Specialist team devoted to the sector, now with more resources behind them at AVI
  • Eclectic portfolio offering access to specialist areas to which many investors won’t have exposure

Bear

  • Structurally higher interest rates could lead to discounts remaining persistent in many areas
  • Corporate activity is unpredictable and may disappoint in significant individual positions
  • Low market cap may mean liquidity is limited
Continue to Portfolio

Fund History

10 Jul 2024 Fund Analysis
MIGO’s managers say there are too many great opportunities to fit them all in the portfolio…
10 Jul 2024 Things can only get better
Discounts are yawning but markets are thawing and boards are on the offensive; Labour might not be the only thing making a comeback this year...
10 Jan 2024 Definitely maybe
Fund flows and discounts may shed some light on a once-in-a-generation opportunity…
29 Nov 2023 Fund Analysis
Manager Nick Greenwood argues current investment trust discounts present a once-in-a-generation opportunity…
25 Oct 2023 We’re going to need a bigger boat...
We argue corporate activity is picking up, making the investment trust sector an exciting place to invest…
27 Sep 2022 Fund Analysis
MIGO’s underlying discount to NAV has rarely been wider…
06 Jul 2022 A game of two halves
In the second article of our series on the AIC Flexible Investment sector we see how performance has stacked up during two years when markets were poles apart...
20 Apr 2022 Fund Analysis
MIGO’s underlying discounts are currently wide relative to history…
14 Apr 2022 The inevitabilities: death and taxes
Biotech has had a rough ride lately but, as the world gets older and richer, our analysts think long-term secular growth is inevitable…
30 Mar 2022 You say tomato…
Do it yourself or put it into a global fund and leave it to the experts - our analyst debate the merits of each approach...
11 Aug 2021 Fund Analysis
MIGO’s managers report that market conditions continue to offer them attractive discount opportunities...
21 Jul 2021 Every which way but loose
We break down the AIC Flexible sector into more useful segments…
02 Jun 2021 Fortune favours the brave (sometimes)
Our research suggests wide discounts often herald high NAV returns too…
19 May 2021 The complexity premium
We examine the idea that extra returns can be obtained from buying investments which are perceived to be more complex by most investors...
10 Feb 2021 Eye of the Pfizer
Mining shares have rallied in recent months. With further potential, what impact could this have on the relative returns of active UK Small cap strategies...
17 Dec 2020 Fund Analysis
Investing in a diverse array of other trusts, MIGO seeks to build a portfolio with significant embedded value...
11 Nov 2020 Now that's what I call a discount!
Presentations and audio from our conference focussed on discount opportunities in the investment trust sector…
11 Nov 2020 Slides and Audio: Miton Global Opportunities
View the presentation and listen to the audio from our 'Discounts in Focus' event on 05 November...
22 Oct 2020 Spotlight on discounts
As our event focussed on discounts approaches, we update our portfolio of discount opportunities and review discounts across the wider IT universe…
09 Jul 2020 Fund Analysis
Using a diverse array of investment trust strategies, MIGO seeks to build a portfolio of trusts with significant embedded value...
06 Nov 2019 Times are a changin'? The case for a value resurgence
We are in the midst of the longest period of value underperformance since the 1920s. Could we be approaching a change in environment?
23 Oct 2019 Kepler Rated: Miton Global Opportunities
This trust pursues a highly specialised 'fund of funds' approach, aiming to identify discounts which the manager thinks do not reflect reality...
25 Sep 2019 One-stop shop: how multi-asset trusts offer superior diversification
Investment trusts are particular suited to this mode of investing. We examine their advantages over open-ended funds and highlight the trusts which do it well…
25 Sep 2019 Fund Analysis
Using a diverse array of eclectic investment trust strategies, MIGO seeks to build a portfolio of trusts with significant embedded value...
13 Feb 2019 Fund Analysis
A highly differentiated fund of investment trusts, which has delivered annualised returns of 7.5% since launch in 2004...
30 May 2018 Fund Analysis
A highly differentiated special opportunities fund of funds, managed by one of the most experienced managers in his sector...
20 Mar 2018 Star struck
Star culture presents siginficant problems for asset management companies when top managers jump ship. We examine the steps some groups take to avoid them...
30 Aug 2017 Smoke and mirrors?
We analyse whether investors should really focus on discounts and premiums when making their investment decisions...
09 Mar 2017 Fund Analysis
A global trust of investment trusts that is diversified in terms of regions and asset classes..
View all

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