In this series of short profiles, we ask leading fund managers to defend their investment strategies, reveal their views on cryptocurrency, and tell us what they'd never buy.
This week our interviewee is Nick Greenwood, manager at the Morningstar 4-star rated MIGO Opportunities Trust (MIGO).
Which Sector Shows the Biggest Promise in 2023?
Uranium. Following the nuclear incident at Fukushima in 2011, the uranium price has been depressed. The global desire to reduce carbon emissions has brought nuclear power back into the mainstream. However, it will be difficult for producers to meet demand. Whilst uranium is not a rare metal, it takes the best part of a decade to build and develop mines. Given low prices, there has been no point in looking for Uranium and little has been invested in finding new deposits. Therefore, new supply will not come on stream until long after demand has increased.
What's the Biggest Economic Risk Today?
Inflation – I was around in the 1970s and can remember how toxic inflation was. Savers’ deposits erode rapidly in value which creates widespread uncertainty and instability.
Describe Your Investment Strategy
I manage an investment trust which seeks overlooked and unloved investment trusts. Share prices in this sector reflect the balance of supply and demand. For example, if there is a lack of interest in a particular investment trust then its shares can trade a long way below the value of the underlying portfolio. It is important to identify the catalyst which will bring about the narrowing of this discount.
Which Investor Do You Admire?
The fictional Larry Livingstone, who is the central character in the book “Reminiscences of a Stock Operator” published in 1923. Larry describes how stock markets worked in the early twentieth century, so much of which remains true today. The book was almost certainly a fictionalised biography of Jesse Livermore, who was the pioneer of day-trading.
Name Your Favourite 'Forever Stock'
I do not tend to have “forever stocks” as hopefully the unloved stocks that I buy will came back into favour and no longer be cheap! The largest position in the portfolio currently is VinaCapital Vietnam Opportunity Fund. In 2005 Vietnam was briefly the hottest investment destination on the planet. The legacy of this is that there are some very large Vietnam trusts which dwarf demand and can therefore trade on wide discounts. We believe that Vietnam will be a major beneficiary of the US–China trade war. Once this view becomes more widely accepted, we hope to enjoy the powerful combination of rising net asset value and a narrowing discount.
What Would You Never Invest In?
Totalitarian countries, as they can change the rules at any time. This makes owning assets an uncertain speculation rather than an intelligent investment.
Growth or Value?
Our style is very much value.
House or Pension?
A house, as you can live in it even if you become broke and it is tumbling down around you
Crypto: Brilliant or Bad?
I have tried my best to find the attraction of Crypto, but maybe I’m too old to understand it. If you do not understand an investment, I think you are better served to stay well away.
What Can be Done to Improve Diversity in Fund Management?
When I started my career, everybody in the City seemed to be white, well-to-do and certainly male. I think the increased intake of state-educated pupils at well-regarded universities will feed through before long, so I am optimistic.
Have you Ever Engaged with a Company and Been Particularly Proud (or Disappointed) in the Outcome?
There are certainly situations that I am proud of, but these situations are more likely to succeed behind closed-doors – so I won’t disclose!
What’s the Best Advice You’ve Ever Been Given?
People are happier when they are talking so, when I interview, I aim to talk for three minutes and the fund manager I am interviewing for 57 minutes. When people are comfortable, they open up more.
What Would You be if You Weren’t a Fund Manager?
I would try and breathe life back into the sport of Speedway. When I was a teenager, it was the second biggest spectator sport behind football – even as recently as the 1970s a team used Wembley Stadium for its regular league matches! For a number of reasons, the sport has been in decline however it is an exciting product so it must have some potential.
