MIGO Opportunities Trust plc – Outlook for H2 2022

Nick Greenwood

MIGO Opportunities Trust plc

This update should not be taken as advice. If you are unsure about any of the content please contact your financial adviser. Please remember that the value of stock market investments will fluctuate and investors may not get back the original amount invested. To assist, where appropriate, a glossary explaining some of the terms used has been provided at the end of this update.

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the vast monetary and fiscal stimulus unleashed by the central banks in response to the pandemic is steadily being withdrawn.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 interest rate rises will slow the economy much quicker than they did in past economic 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 market correction than many commentators are predicting. The majority of the gains we enjoyed post Covid have already been lost and market participants are already acting cautiously. It is difficult to recall the last time we heard a truly positive commentary. It is likely that we have already experienced the bulk of this cautious phase but there potentially remains scope for some gut wrenching falls before we are past the worst. That said, early stage growth companies, that have traditionally been expected to grow at a faster rate than the market average, 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 large discounts which can be found in the closed-ended sector, there are plenty of investment trusts that have the potential for a dramatic re-rating, when the manner in which potential investors view the trust itself changes. We do expect more market volatility to come as the global economic headwinds put pressure on markets. At the time of writing, we have seen most companies fall in unison. 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 investment types now available to us. This means that we can potentially 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 the friendless biotechnology sector. Challenging conditions often create the foundations of the next positive market run and we believe that we are well positioned for these, whilst remaining patient in our approach.

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Risks

All types of investment carry a degree of risk.  It is possible you could lose some, or all, of the money you invest. The level of risk varies depending on the type of investment.

Typically, you are less likely to lose money over the long term from an investment that is considered low risk, although potential returns may also be lower. Investments considered higher risk typically offer greater opportunities for better long-term returns, though the risk of losing money is also likely to be higher.

When you invest, it is important that you understand the risk to your money and are comfortable with that level of risk. If you are unsure, we would recommend that you consult a financial adviser.

The value of your investment might not keep up with any rise in the cost of living.

You could lose money if financial markets fall.

The performance of the trust will be affected by investment decisions made by the fund manager.

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

Glossary

Assets

Different groups of investments such as company shares, bonds, commodities or property.

Closed-ended funds

A portfolio of pooled assets that raises a fixed amount of capital through an initial public offering (IPO) and then lists shares for trade on a stock exchange.

Growth stocks/companies

Typically those companies whose profits are less sensitive to economic activity and can grow profits and generate cash at a rate above the average growth for companies listed on the stock market and through different economic conditions; they usually operate in faster growing industries such as technology or healthcare.

Investment Trusts

Investment trusts are a type of collective investment where a group of investors pool their money to invest in a portfolio of assets. As public limited companies, they trade on a stock exchange so that investors can buy and sell from the market.

Volatility

A measure of the frequency and severity with which the price of an investment goes up and down.

IMPORTANT INFORMATION:

The views expressed in this document should not be taken as a recommendation, advice or forecast. We are unable to give financial advice. If you are unsure about the content contained within/suitability of the funds mentioned, please speak to a financial adviser.

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 fund does not constitute a recommendation to buy or sell the stock or fund. Persons who do not have professional experience in matters relating to investments should not rely on the content of this document.

All data is sourced to Premier Miton unless otherwise stated.

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.

007692/270922

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Disclaimer

This section of the website and the content it contains is for professional financial advisers only and should not be relied upon, or circulated to, retail clients. Retail clients should refer to the Private Investor's site.

The content of the pages of this website is for your general information and use 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.

You acknowledge that such information may contain inaccuracies or errors and we expressly exclude liability for any such inaccuracies or errors to the fullest extent permitted by law. Your use of any information or materials is entirely at your own risk, for which we shall not be liable.

The information contained on this website does not constitute an offer or solicitation to sell shares in the funds or portfolio or to provide you with other products or services. Any application or investment must only be made on the basis of the relevant documentation of the investment, such as, for example, terms and conditions. The information on this website does not constitute any investment, tax, legal or other advice. Persons who do not have professional experience in matters relating to investments should always consult with an independent financial adviser before making an investment decision. Any opinion expressed on individual funds, services or products, represent the views of the individual at the time of preparation and should not be interpreted as a personal recommendation to buy or sell or otherwise trade all or any of the investments that may be referred to.

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Disclaimer

This section of the website and the content it contains is for retail clients only and by persons who are resident in the United Kingdom [who are not US persons]. Professional advisers should refer to the Professional Advisers site.

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.

You acknowledge that such information may contain inaccuracies or errors and we expressly exclude liability for any such inaccuracies or errors to the fullest extent permitted by law. Your use of any information or materials is entirely at your own risk, for which we shall not be liable.

The information contained on this website does not constitute an offer or solicitation to sell or purchase shares in the funds or portfolios or to provide you with other products or services. Any application or investment must only be made on the basis of the relevant documentation of the investment, such as, for example, terms and conditions. The information on this website does not constitute any investment, tax, legal or other advice. Persons who do not have professional experience in matters relating to investments should always consult with an independent financial adviser before making an investment decision. Any opinion expressed on individual funds, services or products represent the views of the individual at the time of preparation and should not be interpreted as a personal recommendation to buy or sell or otherwise trade all or any of the investments that may be referred to.

Website terms of use: Please ensure you have read and accept the full 'website terms of use' before continuing.

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Disclaimer

This section of the website and the content it contains is for professional financial advisers only and should not be relied upon, or circulated to, retail clients. Retail clients should refer to the Private Investor's site.

The content of the pages of this website is for your general information and use 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.

You acknowledge that such information may contain inaccuracies or errors and we expressly exclude liability for any such inaccuracies or errors to the fullest extent permitted by law. Your use of any information or materials is entirely at your own risk, for which we shall not be liable.

The information contained on this website does not constitute an offer or solicitation to sell shares in the funds or portfolio or to provide you with other products or services. Any application or investment must only be made on the basis of the relevant documentation of the investment, such as, for example, terms and conditions. The information on this website does not constitute any investment, tax, legal or other advice. Persons who do not have professional experience in matters relating to investments should always consult with an independent financial adviser before making an investment decision. Any opinion expressed on individual funds, services or products, represent the views of the individual at the time of preparation and should not be interpreted as a personal recommendation to buy or sell or otherwise trade all or any of the investments that may be referred to.

Website terms of use: Please ensure you have read and accept the full 'website terms of use' before continuing.

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