20 years managing the Rathbone Global Opportunities fund

We should be proud of the 1000% return the fund has generated over the past 20 plus years. But there have been plenty of mistakes and things to learn along the way.

Overconfidence and not being willing to admit you’re wrong is perhaps the greatest enemy in this business. I think it’s important not to be convinced of anything. Stay adaptable. A touch of insecurity and doubt is important as an investor, as long as it doesn’t overwhelm you. I still have views and principles, just not immutable.

One of the things I’ve recognized over the past 20 years is accepting that some stocks can be expensive, but not overvalued, an anathema to many value managers, but a painful one. Because these capital-light, mission-critical, long-duration growth companies have dominated market returns. Better growth and greater resilience deserve a higher multiple while the value traps just keep getting cheaper.

The other great enemy is declaring victory too early. Our best contributors to returns have come from companies where we have run our winners for the long term, avoiding the temptation to overtrade, selling out and hoping to come back in again at a more favourable price.

Some would have you believe that this job is all science. I think it’s mostly art, combined with common sense, adaptability and the healing power of time.

Finally, I’ve bored on about my secret sauce for years – the qualities that I look for in a good investment. It’s in fact the people who are the secret ingredient in my secret sauce. I surround myself with smart analysts, strategists, economists, numerous colleagues at Rathbones, trusting and forgiving clients, thanks to you. The only job I do is mix the ingredients together and eat my own cooking. I think I’ve taken that culinary metaphor as far as I can go.

What might the next 20 years look like?

We entered the next 20 years with a scarcity of certainty. I think investment returns will be lower and more inconsistent, but that doesn’t mean you shouldn’t invest. There will be different problems to face, but I’m always impressed with the adaptability and resilience of our businesses. Yes, economic growth is slowing, but the pace of change only gets quicker. It took 90 years to sell 500 million cars. It took 20 years to sell 500 million PCs and mobile phones. But it took just six months to reach 500 million users of chatGPT.

A few months ago, my mother asked me if she should sell her investments and wait for conditions to get better – a bit upsetting because my fund is her largest investment. My advice to her was that if she really had a long-term view and doesn’t expect to need the pot of money within the next five years, then I believe equities, particularly my growth equities, will deliver outstanding returns.

If you’re waiting for the perfect moment, it will never come because the best returns often come when you least expect it.