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
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Overview

Miton Global Opportunities (MIGO) offers exposure to a diversified pool of closed-ended investment companies, often operating in highly specialised areas and trading on substantial discounts to their intrinsic value where the managers believe there is a catalyst for a re-rating. Aiming to deliver cash (SONIA 3 month) plus 2%, the trust is relatively unconstrained in asset allocation.

The managers are focussed on identifying ‘special situations’ and/or deep value opportunities in investment trusts where market conditions for the share price are likely to change in the foreseeable future. MIGO therefore holds an array of idiosyncratic and diversified holdings in a variety of geographies, asset classes and sectors.

With an extensive background in investment-trust investing, the managers, Nick Greenwood and Charlotte Cuthbertson, believe we are likely seeing structural changes to the investment-trust universe, which is opening up opportunities for their approach. Furthermore, as we discuss under Portfolio, they believe we may witness a change in market and economic environment that could catalyse opportunities to narrow discounts across a broad range of assets.

As we discuss under Performance, typically MIGO has displayed resilience in periods of market drawdown. However, the indiscriminate nature of the recent sell-off has impacted returns but created numerous attractive buying opportunities for the managers. Longer-term returns have typically displayed low correlation to those of wider equity markets.

Whilst MIGO trades on an optical discount of c. 2% (as at 18/06/2020), the underlying holdings themselves trade at sizeable discounts to what the managers deem to be their fair-value NAVs based on conservative estimates. There is thus a much greater look-through double discount on the portfolio, as we discuss under Discount.

Analyst's View

This most recent bout of market volatility gave rise to significant buying opportunities to the managers, enabling them to both add new positions at highly attractive valuations and top up existing holdings at very significant discounts. In keeping with the strategy, further significant drawdowns could create more buying opportunities. Having not yet deployed gearing, MIGO might be in a strong position to again pick up assets at attractive valuations if the market falls, whilst we can see potential for value realization from wide discounts in a significant proportion of MIGO’s assets if markets hold their poise.

In any event, the sizeable double discount on the largest positions looks like an attractive entry point for long-term investment, whilst board intervention in managing the headline discount has been accretive for shareholders. Recent events, such as a significant downwards shift in inflation expectations, low stock dispersion and concerns over market liquidity, have been challenging to MIGO’s investment strategy. Over the long term, MIGO has generated superior returns to the UK equity market with a relatively lowly correlated return profile, for the most part due to its diversified book of assets and often idiosyncratic drivers of value realisation. Should we see an uptick in inflationary pressures, and/or investment-trust returns starting to be driven more by their own assets as opposed to wider market forces, MIGO could be well placed to benefit.

bull bear
Could benefit if we see an increase in inflationary pressures The trust is a significant shareholder in some of the underlying holdings, and could face difficulties selling these
Returns have been lowly correlated to those of equity markets in ordinary market conditions Markets look likely to remain driven by economic considerations, reducing stock dispersion
Potential for substantial discount narrowing in underlying holdings due to corporate action Will not suit investors who want to control their asset allocation
Continue to Portfolio

Fund History

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 Fund Analysis
Using a diverse array of eclectic investment trust strategies, MIGO seeks to build a portfolio of trusts with significant embedded value...
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…
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..
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