Press Releases
Miton Asset Management OEICs celebrate third anniversary amid backdrop of strong investment opportunities 23/01/2008
The iimia OEIC within the Miton Asset Management range of funds celebrates its third anniversary this week, just as significant opportunities are presenting themselves within the closed-ended fund sector.
All three of the following funds are actively managed with the managers seeking to add value through shifting asset allocation and taking advantage of the volatility in the discounts on closed-ended funds.
- CF iimia Growth Fund – managed by Nick Greenwood
- CF iimia Growth & Income Fund – managed by Richard Scott
- CF iimia Income Fund – managed by Daniel Lockyer
The three funds within the range offer investors distinctive opportunities as the managers invest in a mixture of both open-ended and closed-ended funds. While the closed-ended funds sector is the main area of focus the two types of holdings complement each other well.
The closed-ended sector is currently very attractive as discount levels have returned towards the compellingly attractive levels last seen in 2003. Last year was a challenging time in the overall sector as performance was undermined by a combination of factors including general market risk aversion and the de-rating of securities with limited liquidity.
Daniel Lockyer, manager of the CF iimia Income Fund, which is in the top decile of the IMA Cautious Managed sector since launch, said: “With the Bank of England almost certain to be making further reductions in the level of interest rates this year, investors will be increasingly searching for income. Recent poor markets have thrown up fantastic opportunities to purchase funds that combine attractive levels of income with excellent potential for capital growth. For example one of the recent purchases in the iimia Income Fund and one we have been buying across the OEIC range is Morant Wright Japan Income Fund.
“This is an investment trust that recently traded at an 18% discount, but as well as providing exposure to domestic orientated Japanese equities at a discount, it also offers a 6% yield – unusually high for a Japanese equity fund. We are optimistic that Japan can perform well in 2008 as at a corporate level the region is doing well despite political issues and Morant Wright’s portfolio is trading extremely cheaply.”
Richard Scott, manager of the CF iimia Growth & Income Fund, which is in the top quartile of its sector since launch, said: “There are likely to be many closed-ended funds in 2008 which see a revival in their managers’ performance relative to their benchmarks, a recovery in the fortunes of the specialist area in which they are invested, and a narrowing in the discount.
“Most overseas exposure should also benefit from further weakness in sterling versus other currencies. Against this background investors are likely to look back in twelve months time and wish they had bought into the closed-ended fund sector at wide discounts when they had the opportunity to do so.”
Looking deeper at investment opportunities globally, Nick Greenwood, chief investment officer at Miton Asset Management, said: “With emerging markets now looking fully valued compared with developed markets, it is going to be increasingly important to invest in the right stocks and sectors within markets rather than relying on a few top down geographic asset allocation calls to generate performance.
“It is probably now the case that some of the cheapest emerging markets shares are not the ones listed in emerging markets themselves, but the shares of companies listed in out of favour developed markets such as Japan, whose businesses are growing strongly on the back of their high exposure to booming economies like China.”
