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McGrath waits on global mega-cap move

Miton Optimal’s plans to gain exposure to a global mega-cap fund in its multi-asset portfolio have been put on ice as manager Tom McGrath is waiting to see an upward trend in the markets.

He has been looking at investment trusts in this area of the market. As a contrarian investor, he found it encouraging that BlackRock recently changed the name and investment remit of the Merrill Lynch global titans fund.

McGrath thinks investors may return to global mega caps that have been performing well due to strong global economic growth.

McGrath says recent market volatility is a wake-up call for investors to focus on quality growth rather than takeover targets in the mid-cap space. But he concedes that it is difficult to see where the markets are heading over the short term and that is why he has delayed buying a global mega-cap fund.

McGrath says: “If people are closing down funds, it is through a lack of interest. People launch at the top and get rid of funds at the bottom. Unloved mega caps have been trading at a discount. Nobody liked them as they cannot be taken over, but the problem is the big caps have been hit just as hard.”

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