The US has been an unforgiving place to be an active investor in recent years. While aggregate market returns have been strong, they have been focused on a handful of technology stocks, which are too expensive and too large a share of the index for active managers to hold significant overweight positions. Hugh Grieves, co-manager on Premier Miton US Opportunities, has wrestled with this problem for his decade at the helm.
He and co-manager Nick Ford launched the fund in 2013, having worked together at Gartmore. They were clear with their investors at launch that there were two circumstances in which it would fall behind its peers and the index – if it was a tough time for mid- and small caps, and if a handful of large-cap stocks performed very well. “If you’d have told me 10 years ago that both those things were going to happen, I’d have packed up my bag and gone home.”
Nevertheless, in spite of these headwinds, the fund has still performed. At the end of February, two weeks shy of its 10-year anniversary, the fund had outperformed the S&P 500 Index. However, any celebrations were cut short by the sudden acceleration in all AI-related stocks and the weakness in the banking sector following the Silicon Valley Bank collapse.
This resulted in another surge for the tech and consumer mega caps – Apple, Microsoft, Meta, Nvidia, Amazon, Alphabet and Tesla. The fund has still outpaced its peers over five and 10 years, but the S&P 500 has surged ahead.
To read more, visit the September edition of Portfolio Adviser Magazine