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“Avoid despair and stay calm”

30 March 2020

Longest-serving investment company managers share their bear market insights.

Following the deep market falls of recent weeks, the Association of Investment Companies (AIC) has collated insights from some of the investment company industry’s longest-serving managers.

Out of all AIC member investment companies (ex VCTs) with a history of longer than ten years, 90 (46%) have had at least one of their current fund managers in place for ten years or more. Some managers have much longer track records. Eighteen investment companies have had the same manager for more than 20 years.

Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC), said: “Coronavirus has had a devastating impact on many people’s lives. It has also swiftly changed the way we live, work, shop and socialise. It’s brought an end to the longest bull market in history and caused sharp market falls. Amidst all this market uncertainty, it’s reassuring to know that nearly half of AIC member investment companies have had the same manager for ten years. Eighteen investment company managers have steered their companies through at least 20 years of market ups and downs, experience that will serve them well in the current volatile market conditions.”

Longest-serving managers

The longest-serving investment company manager is Peter Spiller, who has run Capital Gearing for 38 years. Second is Simon Knott, the manager of Rights & Issues for 36 years. Next is James Henderson who has managed Lowland for 30 years. Completing the top five are Alistair Whyte and Job Curtis who have headed Aberforth Smaller Companies and City of London for 29 and 28 years respectively.

Some of the longest-serving managers share their bear market insights and the most important lessons they have learned below. A full table of the longest-serving managers is also included.

Bear market insights

Peter Spiller, Manager of Capital Gearing, said: “In fifty years of investing I have experienced a number of bear markets. They do come to an end, so avoid despair and stay calm. Precise timing is more problematic, and usually impossible. Currently the battle in equity markets is between exceptional fiscal and monetary stimulus providing support against an economic slump, with luck short-term, and a credit crunch exacerbated by the spat between Saudi Arabia and Russia over oil. Excessive corporate debt has turned a drama into a crisis.”

Katie Potts, Manager of Herald, said: “I have been managing Herald Investment Trust from inception in 1994. The current headache always seems to be the worst. People looked over the edge fearing the collapse of the banks in 2008, but it did not happen – they were rescued, and in hindsight little damage was done to most people’s lives. The lesson is don’t panic.”

Austin Forey, Portfolio Manager of JPMorgan Emerging Markets Investment Trust, said: “Very volatile markets are always stressful, but we have some experience to draw on in terms of what not to do. In a big downturn one thing to avoid is the temptation to run for cover after the crash has happened: it’s very easy to act pro-cyclically, but you should try to avoid that.”

Hugh Young, Manager of Aberdeen Standard Asia Focus, said: “During any crisis one of the most important things to do is to keep calm. Markets sell off and share prices plummet but it’s important not to panic and above all you need to pause for thought. The breakout of COVID-19 in China, its spread across the region and now globally have already impacted economic activity and company profitability and will continue to do so.”

Most important lesson learned

Austin Forey, Portfolio Manager of JPMorgan Emerging Markets Investment Trust, said: “Firstly, don’t force ideas or feel that you have to be finding something to buy and sell every day: concentrate on what makes a difference. Secondly, work out what you’re trying to do and don’t let market cycles or performance cycles drag you off course.”

Buying the dips

Hugh Young, Manager of Aberdeen Standard Asia Focus, said: “The slide in markets has certainly meant companies are a lot cheaper than they once were. But during my over 30-year career I’ve learnt not to focus solely on price. Valuations attached to some companies may be justifiable, if possibly still too expensive, given the headwinds they face. For other companies it could be a good entry point for patient investors. For Asia Focus’ portfolio we’ve identified opportunities around the region where share prices are attractive and the management, balance sheet strength and business model are also compelling. Importantly they’re in good shape to weather the challenges ahead and capitalise on opportunities to take market share.”

Katie Potts, Manager of Herald, said: “I have been running high cash positions because I have been concerned by the high levels of debt of consumers, government and corporates alike. In the corporate sector the leverage in private equity owned companies has been eyebrow-raising. I hope that a silver lining will be the reminder that it is better to have companies funded by equity than debt. Generally, leverage in quoted companies is non-existent or modest, and shareholders are well able to invest further capital in solid businesses that have short-term requirements. The quoted market should be a relatively safe haven, albeit some sectors such as travel and leisure will be challenged.”

Peter Spiller, Manager of Capital Gearing, said: “We entered this period with a defensive position and have added to equity holdings where companies look able to endure unprecedented poor short-term conditions and are trading at large discounts to their long-term value. If the analogy to war means anything, it is that wars always produce inflation; do not be misled by the weakness in the CPI that we expect in the next few months. Inflation-protected assets still have an important role in any long-term portfolio.”

Longer-term outlook

Katie Potts, Manager of Herald, said: “The technology sector is relatively well placed. The surge in home working is leaving unused processing power and storage on the desk. It is also creating a surge in demand for resources to work at home – internet shopping, laptops, internet bandwidth, video conferencing, datacentre cloud processing power and storage for example. In addition, while jobs are cut IT systems remain indispensable for most businesses, and the costs and expenditure will continue.

“The scale of money being printed necessitates low interest rates for a long time, and as the virus recedes an inflationary boom with rising asset prices seems highly probable next year.”

Hugh Young, Manager of Aberdeen Standard Asia Focus, said: “The outlook for the region over the next few months is uncertain given the numerous factors at play. Encouragingly policymakers' reaction has been swift and they continue to have policy tools – both monetary and fiscal – at their disposal. Longer term the economic balance of power will continue to shift from west to east, and Asia will remain a key driver of global growth and home to some of the fastest growing companies in the world.”

Austin Forey, Portfolio Manager of JPMorgan Emerging Markets Investment Trust, said: “As more money is allocated passively and investor time horizons get ever shorter, patient long-term investors should find more and more opportunity.”

Longest-serving investment company managers

Investment company

AIC sector

Manager

Effective

Time

Capital Gearing

Flexible Investment

Peter Spiller

01/01/1982

38 years 2 months

Rights & Issues

UK Smaller Companies

Simon Knott

01/01/1984

36 years 2 months

Lowland

UK Equity Income

James H Henderson

01/01/1990

30 years 2 months

Aberforth Smaller Companies

UK Smaller Companies

Alistair J Whyte

10/12/1990

29 years 3 months

City of London

UK Equity Income

Job Curtis

01/07/1991

28 years 8 months

Herald

Global Smaller Companies

Katie Potts

16/02/1994

26 years 1 months

JPMorgan Emerging Markets

Global Emerging Markets

Austin Forey

01/06/1994

25 years 9 months

Aberdeen Standard Asia Focus

Asia Pacific Smaller Companies

Hugh Young

19/10/1995

24 years 5 months

Schroder AsiaPacific

Asia Pacific

Matthew Dobbs

20/11/1995

24 years 4 months

British & American

UK Equity Income

Jonathan Woolf

03/01/1996

24 years 2 months

Atlantis Japan Growth

Japanese Smaller Companies

Edwin C Merner

10/05/1996

23 years 10 months

Atlantis Japan Growth

Japanese Smaller Companies

Taeko Setaishi

10/05/1996

23 years 10 months

JPMorgan European Growth

Europe

Stephen Macklow-Smith

01/01/1997

23 years 2 months

BMO Capital & Income

UK Equity Income

Julian Cane

01/03/1997

23 years 0 months

JPMorgan Indian

Country Specialist: Asia Pacific - ex Japan

Rukhshad Shroff

01/01/1998

22 years 2 months

JPMorgan Smaller Companies

UK Smaller Companies

Georgina Brittain

02/01/1998

22 years 2 months

JPMorgan European Smaller Companies

European Smaller Companies

Francesco Conte

01/11/1998

21 years 4 months

Chelverton UK Dividend

UK Equity Income

David Horner

12/05/1999

20 years 10 months

Perpetual Income & Growth

UK Equity Income

Mark Barnett

01/07/1999

20 years 8 months

BMO Private Equity

Private Equity

Hamish Mair

01/02/2000

20 years 1 months

Scottish Mortgage

Global

James K. Anderson

01/04/2000

19 years 11 months

BlackRock World Mining

Commodities & Natural Resources

Evy Hambro

01/09/2000

19 years 6 months

Independent Investment Trust

UK All Companies

Maxwell Ward

18/10/2000

19 years 5 months

European Opportunities

Europe

Alexander Darwall

22/11/2000

19 years 4 months

Finsbury Growth & Income

UK Equity Income

Nick Train

11/12/2000

19 years 3 months

HgCapital

Private Equity

Nic Humphries

01/01/2001

19 years 2 months

Jupiter US Smaller Companies

North American Smaller Companies

Robert Siddles

01/01/2001

19 years 2 months

Lindsell Train

Global

Nick Train

22/01/2001

19 years 2 months

Invesco Enhanced Income

Debt - Loans & Bonds

Paul Read

01/02/2001

19 years 1 months

Invesco Enhanced Income

Debt - Loans & Bonds

Paul Causer

01/02/2001

19 years 1 months

International Biotechnology

Biotechnology & Healthcare

Kate Bingham

01/05/2001

18 years 10 months

Aberforth Smaller Companies

UK Smaller Companies

Euan R MacDonald

14/05/2001

18 years 10 months

JPMorgan Russian Securities

Country Specialist: Europe - ex UK

Oleg Biryulyov

09/01/2002

18 years 2 months

Impax Environmental Markets

Environmental

Bruce Jenkyn-Jones

22/02/2002

18 years 1 months

Impax Environmental Markets

Environmental

Jon Forster

22/02/2002

18 years 1 months

Pantheon International

Private Equity

Andrew Lebus

31/07/2002

17 years 7 months

Temple Bar

UK Equity Income

Alastair Mundy

01/08/2002

17 years 7 months

Henderson Smaller Companies

UK Smaller Companies

Neil Hermon

01/11/2002

17 years 4 months

Schroder UK Mid Cap

UK All Companies

Andy Brough

30/04/2003

16 years 10 months

City Merchants High Yield

Debt - Loans & Bonds

Paul Read

01/05/2003

16 years 10 months

City Merchants High Yield

Debt - Loans & Bonds

Paul Causer

01/05/2003

16 years 10 months

Artemis Alpha Trust

UK All Companies

John Dodd

01/06/2003

16 years 9 months

Law Debenture Corporation

UK Equity Income

James H Henderson

01/06/2003

16 years 9 months

Bankers

Global

Alex Crooke

01/07/2003

16 years 8 months

Standard Life UK Smaller Companies

UK Smaller Companies

Harry Nimmo

01/09/2003

16 years 6 months

EP Global Opportunities

Global

Sandy Nairn

15/12/2003

16 years 3 months

Miton Global Opportunities

Flexible Investment

Nick Greenwood

06/04/2004

15 years 11 months

Murray International

Global Equity Income

Bruce Stout

16/06/2004

15 years 9 months

Ruffer Investment Company

Flexible Investment

Steve Russell

08/07/2004

15 years 8 months

Schroder Real Estate

Property - UK Commercial

Duncan Owen

15/07/2004

15 years 8 months

Schroder Real Estate

Property - UK Commercial

Nick Montgomery

15/07/2004

15 years 8 months

BlackRock Greater Europe

Europe

Sam Vecht

20/09/2004

15 years 6 months

Aberdeen New India

Country Specialist: Asia Pacific - ex Japan

Kristy Fong

09/12/2004

15 years 3 months

BMO Commercial Property

Property - UK Commercial

Richard Kirby

17/03/2005

15 years 0 months

Biotech Growth

Biotechnology & Healthcare

Geoffrey Hsu

19/05/2005

14 years 10 months

Brunner

Global

Lucy MacDonald

30/06/2005

14 years 8 months

JPEL Private Equity

Private Equity

Troy Duncan

30/06/2005

14 years 8 months

JPEL Private Equity

Private Equity

Gregory Getschow

30/06/2005

14 years 8 months

JPMorgan American

North America

Eytan Shapiro

01/07/2005

14 years 8 months

JPMorgan China Growth & Income

Country Specialist: Asia Pacific - ex Japan

Howard Wang

01/07/2005

14 years 8 months

Invesco Income Growth

UK Equity Income

Ciaran Mallon

28/07/2005

14 years 7 months

Schroder Oriental Income

Asia Pacific Income

Matthew Dobbs

28/07/2005

14 years 7 months

BMO Global Smaller Companies

Global Smaller Companies

Peter Ewins

31/07/2005

14 years 7 months

JPMorgan European Income

Europe

Stephen Macklow-Smith

02/08/2005

14 years 7 months

JPMorgan European Income

Europe

Michael Barakos

02/08/2005

14 years 7 months

JPMorgan European Income

Europe

Alexander Fitzalan Howard

02/08/2005

14 years 7 months

Chelverton UK Dividend

UK Equity Income

David Taylor

01/12/2005

14 years 3 months

JPMorgan Indian

Country Specialist: Asia Pacific - ex Japan

Rajendra Nair

01/01/2006

14 years 2 months

JPMorgan China Growth & Income

Country Specialist: Asia Pacific - ex Japan

Shumin Huang

02/01/2006

14 years 2 months

JPMorgan Elect Managed Cash

Liquidity Funds

Katy Thorneycroft

01/02/2006

14 years 1 months

JPMorgan Elect Managed Growth

Global

Katy Thorneycroft

01/02/2006

14 years 1 months

Marwyn Value Investors

UK Smaller Companies

James Corsellis

22/02/2006

14 years 1 months

Marwyn Value Investors

UK Smaller Companies

Mark Watts

22/02/2006

14 years 1 months

Polar Capital Technology

Technology & Media

Ben Rogoff

01/05/2006

13 years 10 months

JPMorgan European Growth

Europe

Alexander Fitzalan Howard

04/05/2006

13 years 10 months

Merchants

UK Equity Income

Simon Gergel

01/06/2006

13 years 9 months

Macau Property Opportunities

Property - Rest of World

Martin Tacon

05/06/2006

13 years 9 months

Jupiter Green

Environmental

Charles Thomas

08/06/2006

13 years 9 months

Middlefield Canadian Income Trusts

North America

Dean Orrico

06/07/2006

13 years 8 months

JPMorgan China Growth & Income

Country Specialist: Asia Pacific - ex Japan

Emerson Yee Shun Yip

01/08/2006

13 years 7 months

Standard Life Investments Property Income

Property - UK Commercial

Jason Baggaley

13/09/2006

13 years 6 months

Murray Income

UK Equity Income

Charles Luke

03/10/2006

13 years 5 months

International Biotechnology

Biotechnology & Healthcare

Ailsa Craig

01/11/2006

13 years 4 months

Aberdeen Japan

Japan

Chern-Yeh Kwok

10/11/2006

13 years 4 months

Volta Finance

Debt - Structured Finance

Alexandre Martin-Min

15/12/2006

13 years 3 months

Henderson Opportunities

UK All Companies

James H Henderson

24/01/2007

13 years 2 months

Henderson Far East Income

Asia Pacific Income

Michael Kerley

02/02/2007

13 years 1 months

Allianz Technology

Technology & Media

Walter Price

01/05/2007

12 years 10 months

Real Estate Credit Investments

Property - Debt

Richard Lang

25/06/2007

12 years 9 months

Henderson Diversified Income

Debt - Loans & Bonds

John Pattullo

18/07/2007

12 years 8 months

Henderson Diversified Income

Debt - Loans & Bonds

Jenna Barnard

18/07/2007

12 years 8 months

Third Point Offshore Investors

Hedge Funds

Daniel S. Loeb

20/07/2007

12 years 8 months

Third Point Offshore Investors

Hedge Funds

Munib Islam

20/07/2007

12 years 8 months

Third Point Offshore Investors

Hedge Funds

Brad Radoff

20/07/2007

12 years 8 months

Third Point Offshore Investors

Hedge Funds

Neel Devani

20/07/2007

12 years 8 months

Third Point Offshore Investors

Hedge Funds

Timothy S. Lash

20/07/2007

12 years 8 months

Third Point Offshore Investors

Hedge Funds

Brigitte M. Roberts

20/07/2007

12 years 8 months

Third Point Offshore Investors

Hedge Funds

Jim Carruthers

20/07/2007

12 years 8 months

Third Point Offshore Investors

Hedge Funds

Jeff Perry

20/07/2007

12 years 8 months

Third Point Offshore Investors

Hedge Funds

Rob Schwartz

20/07/2007

12 years 8 months

Gulf Investment

Global Emerging Markets

Leonard O'Brien

31/07/2007

12 years 7 months

Asia Dragon

Asia Pacific

Adrian Lim

31/08/2007

12 years 6 months

Volta Finance

Debt - Structured Finance

Francois Touati

01/10/2007

12 years 5 months

Volta Finance

Debt - Structured Finance

Serge Demay

01/10/2007

12 years 5 months

Princess Private Equity Holding

Private Equity

Rene Biner

01/11/2007

12 years 4 months

Princess Private Equity Holding

Private Equity

Marcel Erni

01/11/2007

12 years 4 months

Princess Private Equity Holding

Private Equity

Alfred Gantner

01/11/2007

12 years 4 months

Princess Private Equity Holding

Private Equity

Philipp Gysler

01/11/2007

12 years 4 months

Princess Private Equity Holding

Private Equity

Walter Keller

01/11/2007

12 years 4 months

Princess Private Equity Holding

Private Equity

Sandra Pajarola

01/11/2007

12 years 4 months

Princess Private Equity Holding

Private Equity

Christoph Rubeli

01/11/2007

12 years 4 months

JPMorgan Japanese

Japan

Nicholas Weindling

12/11/2007

12 years 4 months

CQS New City High Yield

Debt - Loans & Bonds

Ian Francis

30/11/2007

12 years 3 months

VinaCapital Vietnam Opportunity

Country Specialist: Asia Pacific - ex Japan

Andy An Ho

01/01/2008

12 years 2 months

JPMorgan Elect Managed Income

UK Equity Income

John Baker

01/03/2008

12 years 0 months

BMO Managed Portfolio Growth

Flexible Investment

Peter Hewitt

16/04/2008

11 years 11 months

BMO Managed Portfolio Income

Flexible Investment

Peter Hewitt

16/04/2008

11 years 11 months

Crystal Amber

UK Smaller Companies

Jonathan Marsh

17/06/2008

11 years 9 months

Crystal Amber

UK Smaller Companies

Richard Bernstein

17/06/2008

11 years 9 months

Blue Planet Investment Trust

Global High Income

Kenneth Murray

18/06/2008

11 years 9 months

JZ Capital Partners

Flexible Investment

David W Zalaznick

01/07/2008

11 years 8 months

JZ Capital Partners

Flexible Investment

Jay Jordan

01/07/2008

11 years 8 months

Baring Emerging Europe

European Emerging Markets

Matthias Siller

01/12/2008

11 years 3 months

Personal Assets

Flexible Investment

Sebastian Lyon

03/03/2009

11 years 0 months

NB Private Equity Partners

Private Equity

Anthony D. Tutrone

13/03/2009

11 years 0 months

NB Private Equity Partners

Private Equity

John P. Buser

13/03/2009

11 years 0 months

NB Private Equity Partners

Private Equity

Brien P. Smith

13/03/2009

11 years 0 months

NB Private Equity Partners

Private Equity

David S. Stonberg

13/03/2009

11 years 0 months

NB Private Equity Partners

Private Equity

Jonathan D. Shofet

13/03/2009

11 years 0 months

NB Private Equity Partners

Private Equity

John H. Massey

13/03/2009

11 years 0 months

NB Private Equity Partners

Private Equity

Joana Rocha Scaff

13/03/2009

11 years 0 months

JPMorgan US Smaller Companies

North American Smaller Companies

Don San Jose

01/05/2009

10 years 10 months

Scottish Mortgage

Global

Tom Slater

01/08/2009

10 years 7 months

Troy Income & Growth

UK Equity Income

Francis Brooke

01/08/2009

10 years 7 months

Mercantile

UK All Companies

Anthony Lynch

31/12/2009

10 years 2 months

Witan

Global

Andrew Bell

01/02/2010

10 years 1 months

Source: AIC/Morningstar (as at 27 March 2020).

-Ends-

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Notes

  1. The percentage of investment companies that have had at least one manager for the last 10+ years is based on all AIC member investment companies that launched during or before March 2010.
  2. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment.  Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. As at the end of February, the AIC had 362 members and the industry had total assets of approximately £196 billion.
  3. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance.  The value of investment company shares, and the income from them, can fall as well as rise.  You may not get back the full amount invested and, in some cases, nothing at all.
  4. To stop receiving AIC press releases, please contact the communications team.

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