MIGO Opportunities Trust: Outlook for 2022

Nick Greenwood

MIGO Opportunities Trust plc

Looking forward, the vast monetary and fiscal stimulus unleashed by the central banks in response to the pandemic is steadily being withdrawn. This will continue to take an inevitable toll on asset values. Where we differ from current consensus is that we believe that rate rises will slow the economy much quicker than they did in past cycles as the amount of debt within the financial system is much higher. With this in mind, we are likely, therefore, to experience a shorter but more brutal correction than many commentators are predicting. The majority of the liquidity fuelled gains we enjoyed post Covid have already been lost and market participants are already bearish. It is difficult to recall the last time we heard a bullish commentary. It is likely that we have already experienced the bulk of the bear phase but with scope for some gut wrenching falls before the cycle is completed. That said, early stage growth stocks still feel like a bubble where some air still needs to escape.


Turbulent markets can have a tendency to throw up opportunities. Given the historically wide discounts which can be found in the closed-ended sector, there are plenty of trusts that have the potential for a dramatic re-rating. We do expect more volatility to come as the global economic headwinds put pressure on markets. At the time of writing, we have seen most stocks fall in unison. As we discussed earlier with regard to the mining sector, the wheat has yet to be sorted from the chaff. Once the difficulties from inflation and rising interest rates start properly feeding through into company results, we may see a divergence between those with stronger underlying portfolios and we are constantly monitoring where these potential pitfalls could be. One of the advantages of the closed-ended world, in our opinion, is the variety of asset classes now available to us. This means that we have more opportunities to choose from. There will always be sectors that are hot, where investors have already priced in the good news, and those under the cosh, where fears are fully reflected in the market price. A recent example would be how we sold out of the booming shipping industry and recycled the money into friendless biotechnology sector. Challenging conditions often create the foundations of the next bull run and we believe that we are well positioned to take advantage of any potential pricing inefficiencies given our closed-ended structure, which allows us to be patient whilst waiting for investments to mature.

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Risks

The value of investments may fluctuate which will cause fund prices to fall as well as rise and investors may not get back the original amount invested. Reference to any particular investment does not constitute a recommendation to buy or sell the investment.

For trusts investing globally, currency exchange rate fluctuations may have a positive or negative impact on the value of your investment.

Future forecasts are not reliable indicators of future returns.

IMPORTANT INFORMATION:

Whilst every effort has been made to ensure the accuracy of the information contained within this document, we regret that we cannot accept responsibility for any omissions or errors. The information given and opinions expressed are subject to change and should not be interpreted as investment advice. Reference to any particular stock or investment does not constitute a recommendation to buy or sell the stock / investment.

All data is sourced to Premier Miton unless otherwise stated. Persons who do not have professional experience in matters relating to investments should not rely on the content of this document.

For your protection, calls may be monitored and recorded for training and quality assurance purposes.

A free, English language copy of the trust’s full Prospectus, the Key Information Document and Pre-investment Disclosure Document are available on the Premier Miton website, or you can request copies by calling us on 01483 306090.

Financial Promotion issued by Premier Miton Investors. Premier Portfolio Managers Limited is registered in England no. 01235867. Premier Fund Managers Limited is registered in England no. 02274227. Both companies are authorised and regulated by the Financial Conduct Authority and are members of the ‘Premier Miton Investors’ marketing group and subsidiaries of Premier Miton Group plc (registered in England no. 06306664). Registered office: Eastgate Court, High Street, Guildford, Surrey GU1 3DE.

007030/110722

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The content of the pages of this website is for your general information only. It, and the products and services described within it, are subject to change without notice. We shall not be liable to you, or any third party, for any amendment, modification, suspension or discontinuance of any product or service described on our website. Neither we, nor any third parties, provide any warranty or guarantee as to the accuracy, timeliness, performance, completeness or appropriateness of the information and materials made available on this website.

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