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Investment Uncovered: Miton’s multi-asset stars on finding balance across their range

Miton multi-asset star managers David Jane and Anthony Rayner were keen to emphasise pragmatism when launching their new fund earlier this year.

The Balanced Multi-Asset fund completes a four-strong range for the team, sitting alongside its Cautious and Defensive Multi-Asset and Cautious Monthly Income vehicles.

David Jane

The fund launched with a 10 per cent cash position. Jane, who has been in the investment industry for almost 30 years, including four at Miton, says the high allocation is intended to give a layer of protection.

Seventy per cent is invested in equities and 20 per cent in bonds. “We are not really betting on bonds; we are not in a rush,” he says.

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The duo, supported by assistant fund manager Henna Hemnani, manage more than £870m-worth of assets across Miton. They are taking a “pragmatic” approach to asset allocation in the new fund, which means there is no fixed view as to how it will be invested.
The managers say its equity portion can easily move back from the current 70 per cent to 40 per cent if more defensive calls need to be made.

Anthony Rayner

Rayner says: “At the moment, growth is very strong but the market is struggling between the positive of growth and volatility of inflation.”

Holdings include cyclical, oil and miners and bank stocks, as well as emerging market equities. The largest equity exposures currently are Japan, Europe and Asia. In the UK, it is very defensive, only owning international stocks such as HSBC, BT and Shell.

Adding to the mix

he multi-asset space is a crowded one, with many fund groups offering a wide range of products for different risk levels. The pension freedoms have made such funds more highly sought-after by advisers in the hunt for both income and a diversified source of returns.

So, what makes this one different?

Jane says it is aimed at younger investors looking to build up capital with equity-like returns. However, it carries less risk than similar funds available in the market.

He says: “Companies with bigger multi-asset ranges provide a very bespoke service, but when you talk to advisers they are looking for an outcome fund. Also, we are not a fund of funds; we invest directly in securities. That is a distinguishing feature.”

The two managers’ work together can be traced back to the early 2000s when they held various roles at M&G.

Jane was portfolio manager of the M&G Managed and Cautious Multi-Asset funds, which he launched in 2007 and grew to more than £300m under his tenure. Rayner worked on portfolio construction and risk for its UK equity funds and then for the multi-asset fund range.

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After M&G, Jane went on to found a new asset management firm, Darwin Investment Managers, in 2010. Rayner joined in 2012, retaining his role as portfolio construction and risk analyst on the company’s multi-asset fund. The firm was sold to Miton in 2014.

“We are different people,” says Rayner. “David tends to see the glass half full, while I am more of  a pessimist.”

Research costs When it comes to research under  the new Mifid II rules, Jane says it does not represent a “material cost” for the company.

Under the legislation, which came into force in January, asset managers must disclose how much they pay brokers for investment research separately from trading costs. They must then declare whether they pass these costs to their clients or pay for it out of their own pockets. “The overall budget for research is very small. It is more than adequate and sufficient,” he says.

“There is a lot of talk, insight and opinion [among providers] so we only select independent companies. We only have two investment banks we use for research.”
The Miton Cautious Monthly Income fund has delivered top quartile performance since its launch in 2011, as has the Cautious Multi-Asset and Defensive Multi- Asset funds since Jane took over management in June 2014, according to FE.

The new Balanced fund sits within the IA Mixed Investment 40-85 per cent shares sector and has income and accumulation share classes. The F share class has an ongoing charges figure capped at 1 per cent, while the B share class has an OCF capped at 1.5 per cent.

 CV

David Jane

2014-present:  Fund manager, Miton Group

2010-2014: Founder, Darwin Investment Managers

2000-2010: Head of equities, M&G Investments

1999-2000: Deputy head of research, Axa Investment Managers

1992-1998: Director, Newton Investment Management

Anthony Rayner

2014-present: Fund manager, Miton Grouip

2012-2014: Portfolio construction and risk analyst, Darwin Investment Managers

2005-2011: Portfolio analyst UK equities, M&G

2001-2004: Lived in Cuba for a year, then Spain, learning Spanish and teaching English

1998-2001: Asset allocation and economics team, Merrill Lynch Investment Managers

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