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CF Miton Special Situations Fund celebrates 10 years in top quartile 23/01/2008
The top-performing CF Miton Special Situations Fund, managed since launch by Martin Gray, recently celebrated its 10 year anniversary.
The global fund of funds is first in the IMA Balanced Managed sector since launch, having risen over 215.1% compared with 73.5% for the sector. It has also been in the top decile in eight of the 10 years.
The Miton Special Situations Fund focuses on long-term asset allocation which allows much more than diversification of risk – it offers an opportunity to pursue a wider search for under-researched, misunderstood or undervalued opportunities globally.
With a top-down approach to investing, the Fund has invested successfully in a number of themes over the last decade. For example, manager Martin Gray has held gold in the Fund since launch, first by investing in the production of gold and more recently by investing in exploration companies which are still not rated highly against producers. Continued small purchases in the gold exploration sector have taken the resource weighting in the portfolio to over 10% during the last quarter, despite some profit taking in the gold production sector. Martin says: “If quantities in exploration are delivered to any where near the match prospectuses, then huge upside price potential is possible.”
Another strong theme has been investing in the East over the West particularly when it comes to equity investing. Entering 2008, the Fund continues to have a high weighting to Asia and Japan versus a very low weighting to the US, UK and European equities. Martin says: “The big question is, can Asia and the emerging markets quickly become the demand engine, rather than the supply engine of the world economy? This seems a very big ask to me. However, in the shorter term demand could remain strong in these areas as output is less reliant on credit, local currencies are relatively undervalued and most have lower budget deficits compared to developed countries. Special Situations has been heavily weighted towards the Asian region for some while, with particular emphasis on China and more recently Taiwan. I am nervous about the impact of a world slowdown/recession and have taken some profits recently but at this stage I am still bullish about the prospects for most Asian markets for the medium term.”
The Fund finished its tenth year with a flourish as a number of the themes in the portfolio performed well in the current volatile asset markets, including his recent move into euros, Swiss francs and yen in preference to the dollar and sterling – which Martin thinks are likely to remain weak as their relatively high interest rates are cut.
Mike Phillips, Chief Executive of iimia MitonOptimal plc, said: “The CF Miton Special Situations Fund, one of the oldest in the Miton Asset Management range, is a great example of the way we manage money. Like all of our funds, this one has been managed since launch by the same fund manager.”
