Premier Miton US Smaller Companies

Following the success of the Premier Miton US Opportunities fund, Nick Ford and Hugh Grieves launched this smaller companies offering. It has a much greater emphasis on growth, with the managers looking for new and exciting disruptive companies which can become big winners in the future. The fund is well diversified with between 70 and 100 holdings.

Previously LF Miton US Smaller Companies Fund

Our opinion

The US has been the breeding ground for some of the world’s best growth opportunities. By targeting the smaller companies space, the experienced managers of this fund should be able to capture those stories early in their journey. We like that they target some fledgling companies and that they run their winners as a company continues to grow.

Fund manager

Nick Ford and Hugh Grieves have run this fund together since launch in March 2018. Nick has more than 20 years’ experience managing equity funds and has previously worked at Scottish Widows, Gartmore, Sun Alliance, Clerical Medical and F&C. He joined Premier Miton in December 2012. Hugh also has over two decades' worth of investment experience. He worked on the US smaller companies fund at Gartmore between 1995 and 2000, was a co-manager, and then sole manager, of the technology funds at Société Générale Asset Management between 2000 and 2009, and he worked on the Herald Worldwide fund before joining Premier Miton in January 2013. Hugh is a CFA charterholder.

Investing is like dieting, everyone knows what you should do. The difficult part is having the discipline to stick to it.

Nick Ford and Hugh GrievesFund manager

Investment process

This is a true smaller companies fund, with a real focus on high growth firms. The team looks for early-stage companies - even fledgling businesses - which the managers consider to have a lot of potential.

The team identifies potential investment opportunities through conferences, company meetings and research screens. It is looking for high revenue growth rates, at premium valuations, concentrating on platform business models which have high need products, high recurring revenues, high barriers to entry and low capital intensity.

The team also uses a stock screening tool called the ‘O’Neil Methodology’, developed by William J. O’Neil in the 1960s. It is based on the theory that each stock repeatedly shows certain characteristics and movements prior to making a big price move. This helps the team to pinpoint the best entry and exit points of a stock.

The managers have a tendency to invest in firms quite early on in their listing, including IPOs. This is because these newer, growing companies are more suited to the style of the fund. The portfolio tends to have a significant technology weighting, with other dominant sectors including consumer discretionary and healthcare. Conversely, it will typically avoid areas such as oil & gas and utilities, where there is little growth opportunity. The ability to allow the best stocks to continue to run if they are doing well will mean there are some larger firms in the portfolio.

ESG

ESG - Integrated

Premier Miton, as a firm, believes managers should have the autonomy to make their own investment decisions based on the inputs available to them, and therefore has no house view on ESG limitations. It does, however, believe that ESG considerations should be fully integrated into the investment process and considered alongside financial factors. This allows the managers to then make a call as to what level of risk they are prepared to take. Here, ESG analysis is performed alongside financial factors by the fund managers as part of their stock selection process for the fund. There is also a focus on corporate engagement and voting to try and improve portfolio companies.

Risk

The fund runs a reasonably flat structure, with each idea only rising to around 4% of the fund. This means that if individual names do have issues, they should only have a limited impact on performance. Growth orientated markets are likely to be good backdrops for the fund, but more value focused ones, such as 2022, are likely to prove more difficult. Having a focus towards smaller companies will also lead to weakness when markets are risk averse.

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Read more about this fund

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