“Avoid despair and stay calm”

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-

Notes

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.
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.
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.
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“Avoid despair and stay calm”

Longest-serving managers

Bear market insights

Most important lesson learned

Buying the dips

Longer-term outlook

Longest-serving investment company managers

Temple Bar: The Return of The Total Return Kings

Fidelity: Why the UK is a fount of Special Value

Biotechnology & Healthcare: a sector on the mend?

Fidelity: Why UK equities may have finally turned a corner

VCTs: deployment slows in challenging environment (updated)

Chinese New Year

“Avoid despair and stay calm”

Longest-serving managers

Bear market insights

Most important lesson learned

Buying the dips

Longer-term outlook

Longest-serving investment company managers

See also

Temple Bar: The Return of The Total Return Kings

Fidelity: Why the UK is a fount of Special Value

Biotechnology & Healthcare: a sector on the mend?

Fidelity: Why UK equities may have finally turned a corner

VCTs: deployment slows in challenging environment (updated)

Chinese New Year

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