Premier Miton Multi-Asset Global Growth Fund – The team’s 10 year anniversary

Ian Rees

Premier Miton Multi-Asset Global Growth Fund
Ian Rees, Head of Research and Deputy Head of Premier Miton’s multi-asset multi-manager funds, discusses the team’s long-term, proven investment approach over their successful 10 year tenure of managing the Premier Miton Multi-Asset Global Growth Fund, as well as their investment outlook and portfolio positioning.

In July 2012*, the Premier Miton multi manager team started managing the Premier Miton Multi-Asset Global Growth Fund. This period has featured fear of EU country defaults, a massive quantitative easing programme implemented by central banks, Brexit, Trump, the coronavirus pandemic, Russia’s invasion of Ukraine, plus much more, and all the associated market volatility. Through all this, to the end of July 2022, the fund has achieved a 9.80% annualised return compared with 6.97% from the IA Flexible Investment sector since the team’s tenure.

The performance information presented in this insight note relates to the past. Past performance is not a reliable indicator of future returns.

On 1 July this year, we reached the ten year milestone of managing the Premier Miton Multi-Asset Global Growth Fund under the stewardship of the multi manager team. Over this time we have consistently applied our investment approach of blending together what the team believes are the best mix of managers, styles, sectors and thematic ideas, in delivering a diversified fund mostly exposed to global equities.

Using the flexibility of a multi asset approach, the fund is categorised in the IA Flexible Investment sector. Recent success has demonstrated the ability of this strategy to outperform the average fund in the sector, including 2021, a strong year for global equities, as well as over the year to date in 2022, a notably weak period for global equities. Real success however is best judged over a longer time span, so we are pleased to have delivered a return of 156.76% after all fees in the 10 years since we have been managing the strategy, comfortably beating the average return of 97.32% from the IA Flexible Investment sector.

During this time, the fund has been able to outperform the sector in 7 out of 9 possible calendar years, as well as in the second half of 2012 and over the year to date in 2022. This investment outcome is testament to the disciplined application of our investment approach over this time. Whilst the long term investment outcome is one that we are proud to have generated, we do recognise that any investment process will endure its own trials and encounter periods where it is tested by market conditions. We make sure we learn from these experiences, challenging and evolving our contrarian approach that has led to the superior investment outcome generated.

Our consistent investment approach

As a reminder for our investors, here are some of the main attributes of the Premier Miton Multi-Asset Global Growth Fund:

  • A globally oriented multi-asset portfolio that provides exposure to a diverse range of asset classes, predominantly equities, but also including bonds, property, and alternatives.
  • The primary objective is to deliver capital growth over the long-term, being 5 years or more.
  • Emphasis on active fund management.
  • Managed by a stable and very experienced team.
  • Integrate ESG considerations into the investment selection criteria.
  • Strategy employs a disciplined, value-led approach to achieve portfolio objectives.
  • Regional equity weightings are tilted from a more balanced starting weight of 15% across US, UK, Europe, Japan, Asia and Emerging Market regions. The tactical allocation is capped at 30% for each region or 20% for each of Asia Pacific ex-Japan and Emerging Market equities.
  • The portfolio is structurally underweight US equities in market capitalisation terms, which differs markedly from the composition of the FTSE All World Index.
  • Global equity themes in the form of industry specific funds lead to the potential for further significant differences at the industry sector level versus the FTSE All World Index.
  • Investment selection leads to a blend of investment styles for the majority of the time, with an occasional tilt towards value, given the relative value approach.
  • Seeking exposure across the market cap spectrum with good emphasis placed on funds exposed to medium and smaller sized companies.


Global diversification


*Please note that all numbers in the table above have been rounded to the nearest decimal place.

The table above shows our asset allocation within the fund as at 30th June 2022.

Investors may note that we have been underweight the expensive US stock-market and overweight the relatively cheap UK stock market for some time. This contrarian position has required patience in getting its reward, something that we have enjoyed so far this year. With a higher concentration of high growth (and high valuation) companies coming under increasing pressure, the US S&P 500 Index has lost -12.81% of value over the year to the end of July. In contrast, the UK FTSE All-Share Index (with a heavier reliance on energy companies, USD earners and higher allocation to more defensive sectors) has only declined by -0.41% over the same period.

By employing an active management strategy we have carefully built our exposure to Asian and emerging market equities over the course of the last year, as lockdown and regulatory concerns of China took hold. We have started to take some of our recent gains from UK equities and have reduced the allocation to Europe given the regional mire facing it.

Given the more challenging macroeconomic backdrop and tightening of financial conditions by the central banks of the US and UK, the fund has adopted a more defensive tone since the start of the year having reduced equity exposure a little.

The invasion in Ukraine, ongoing Covid disruptions in China and other parts of Asia, and resurgent inflation fuelled by supply chain constraints as a consequence of both these events, has led the outlook to be one of increasing volatility in financial conditions and financial markets. This has encouraged us to build exposure to ‘alternative’ assets and strategies with fundamental drivers we believe will be less sensitive to the wider macroeconomic environment, be they battery storage assets, long-lease healthcare properties, digital infrastructure investments or music royalty funds.

It is our belief that the current portfolio positioning can be rewarded when investors are less driven by macro positioning and recognise stock fundamentals, favour GBP denominated assets and look beyond the mega-cap stock names in seeking returns. As such, we believe the fund is be positioned to benefit from weaker market correlations, enabling greater opportunity for us and our chosen stock-picking fund managers to outperform. In contrast, the current stance of the portfolio is likely to face headwinds when markets are driven by US equities and growth styles and more specifically during periods of strong momentum when markets have a narrow focus of support at the sector or stock level.

To all our investors and prospective investors, than you for your continued support and interest.

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Risks

The value of stock market investments will fluctuate, and investors may not get back the original amount invested.

Alternative investments typically behave differently to traditional investments such as bonds and equities. They can include a range of assets such as specialist lending, private equity, hedge funds and gold. Adding alternative investments to a portfolio can help to make it more diverse but can also make it more volatile.

Investments made in bonds, equities or other assets in less-developed countries generally carry higher risk than in developed countries.

Equities (shares) can experience high levels of price fluctuation.

Where other funds are held in a portfolio, or where there is indirect exposure to other funds, these could include higher-risk investments like hedge funds, property funds or commodity funds (e.g. investing in gold, oil), which would increase the overall risk in the fund.

This fund may experience high volatility due to the composition of the portfolio or the portfolio management techniques used.

Forecasts are not reliable indicators of future returns.

IMPORTANT INFORMATION:

For Investment Professionals only. No other persons should rely on any information contained in this fund manager insight.

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.

The fund is classified in the IA Flexible Investment sector, which we believe is a meaningful comparator to help investors assess the performance of the fund.

*The team took over management of the fund on 01.07.2012.

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.

Performance source: FE Analytics. Based on sterling class C Income shares, on a total return basis to 31.07.2022. Performance is shown net of fees with income reinvested. On 20 January 2020, this fund moved from a single pricing basis (mid) to a swing pricing basis, which is where the price can swing to either a bid or an offer basis depending on the investment and redemption activity in the fund. This means the investor selling or buying fund shares bears the associated [dis]investment costs and protects the continuing holders in the fund. Performance could be shown on a combination of bid, mid or offer prices, depending on the period of reporting.

Source: FTSE International Limited (“FTSE”) © FTSE 2022. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE under licence. All rights in the FTSE indices and / or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and / or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

“Copyright © 2022, S&P Dow Jones Indices LLC. Reproduction of S&P Indices in any form is prohibited except with the prior written permission of S&P. S&P does not guarantee the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions, regardless of the cause or for the results obtained from the use of such information. S&P DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall S&P be liable for any direct, indirect, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with subscriber’s or others’ use of S&P Indices.”For your protection, calls may be monitored and recorded for training and quality assurance purposes.

A free, English language copy of the fund’s full prospectus, the Key Investor Information Document and Supplementary Information 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.

007489/010922

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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.

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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.

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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.

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