‘Our biggest mistake was backing the high street’
Miton European Opportunities celebrated its third birthday in some style last month, having been the best-performing fund in its sector since launch. As three years is the typical length of time investors commonly use to judge a fund’s track record, we felt the time was right for Telegraph Money to quiz the managers behind the £376m fund, Thomas Brown and Carlos Moreno.
How would you sum up your investment approach?
CM: We always do the same thing. Europe is a broad index with maybe 1,500 stocks in the size range we’d invest in. We look for the baubles, the 50 best stocks within that universe, buy them and hold on.
Who is the fund for?
TB: We don’t invest using complex strategies – it’s a very simple model so there is nothing in there to dissuade anyone. But we prefer investors who will stick with investments for the medium to long term.
Which sort of holdings do you avoid?
TB: There are sectors that are just not particularly interesting to us. For example, utilities are regulated to have a relatively modest return on capital. While people can make a lot of money investing in utilities, it is just not what we do. We are very dogmatic in what we are looking for and are consistent in having that strategy for the long term.
What do you like about Germany, Switzerland and the Nordics?
TB: It just so happens that we find really good companies that happen to be in these regions.
Do you take politics into account when investing in Europe?
TB: We don’t, unless the entire
CV: Thomas Brown & Carlos Moreno
Mr Moreno o joined Miton on in August 2015 from J JO O Hambro Capital apital Management ent Group. Mr Brown began at Miton in November 2015 from Mitsubishi UFJ Asset Management (UK). investment case hinged on it. If a company produced goods in Europe but sold only in the UK, for instance, and you knew whatever happens to the pound due to Brexit will have a big impact on where that business will be in three to five years’ time, that company wouldn’t be for us. CM: For every company we own that we think is somewhat linked to the economy, we own a company that we perceive to be “defensive”, and we balance it at all times to 50:50.
The managers of Miton European Opportunities tell
about futurology, Ferraris, farming (and funds)
The fund is doing well but is also young. What would you say to investors who value longevity?
TB: I started in 1999, and Carlos has another five years on top of that. We’ve seen boom and busts, recoveries – a lot has happened. So we think we have decent experience to bring to this.
Even in just three years, quite a lot has happened in Europe. When we launched the fund, a lot of people were telling us Europe was a total basket case and uninvestible. Sentiment has swung between extremes of the pendulum in just three years.
What was your biggest mistake?
TB: It sounds ridiculous to say it now, but we launched lau with H&M, the clothing shop, in the portfolio. It under underperformed the market and we sold it. Looking back it seems l ludicrous we would have launche launched with a high-street retailer, but we did. Thankfully we cha changed our minds early in tha that process. Mo Moreno: We are in the fut futurology game. Sometimes