Winner: Miton Global Opportunities Trust
Miton Global Opportunities Trust (MIGO) enjoyed a purple patch in 2016 and 2017. It therefore claims the award in this exceptionally varied sector.
Manager Nick Greenwood runs a highly diversified portfolio by investing in other trusts and closed-ended funds he believes to be trading on unjustifiably wide discounts.
Over the past four years, his main portfolio themes have been private equity and obscure corners of the property market. Equity-oriented trusts focused on relatively strong economies, particularly if they are benefiting from new managers, also feature.
He still favours all three themes, but has trimmed his exposure and expects his portfolio to look very different by next Christmas.
One reason is that the consolidation of the private wealth management sector means trusts capitalised at up to £400 million can be considered too small to be included on ‘buy’ lists, leading to them being overlooked and undervalued. In addition, trusts that specialise in alternative assets can be undervalued because they are difficult to understand.
Greenwood is watching the infrastructure sector carefully, as it has grown so large that limited sales – triggered by rising interest rates coupled with escalating political worries – could flood the market and widen discounts. Greenwood thinks this could prompt institutional investors to step in, and he might view that as a buying opportunity.
Highly Commended: F&C Managed Portfolio Growth
F&C Managed Portfolio Growth (FMPG) also invests in a geographically diversified portfolio of closed-ended funds for capital growth, but its holdings are more equity-oriented than Miton’s – just 10 per cent are in private equity and property.
Helped by substantial overseas exposure, its NAV total returns have exceeded its FTSE All-Share index benchmark in four of the past five years, and over the three years to the end of January 2018 they were 40.4 per cent.
Peter Hewiit has managed FMPG since its launch 10 years ago. He likes trusts ‘run by managers with a clear, disciplined style and long-term performance records’, such as the three Baillie Gifford trusts that feature in FMPG’s top 10: Monks, Scottish Mortgage and Baillie Gifford Japan. But he has suffered recently from his loyalty to Neil Woodford and Invesco Perpetual’s Mark Barnett.
To guard against downside risks, he keeps a good geographic spread and holds Personal Assets, RIT Capital Partners and Ruffer Investment Company, which are all defensively positioned. More positively, he has maintained an exposure to secular growth opportunities, and did well last year from sizeable stakes in Polar Capital Technology Trust, Allianz Technology and Syncona.
FMPG’s ongoing charges are lower than MIGO’s. Its discount is supported.
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