The Tip Sheet

The Times thinks Schiehallion offers something different for sophisticated investors, while This is Money runs the rule over JPMorgan American.

The Tip Sheet

By Frank Buhagiar

Tempus – Schiehallion offers something different, if you dare…
To summarise the investment case presented in the above tip from The Times’ Tempus Column, it’s helpful to flip the article on its head and start at the end: “Advice Buy. Why? High risk and only for sophisticated investors, but provides meaningful diversification from traditional investments.” High risk? As Schiehallion (MNTN) itself says, it’s one for professional and sophisticated retail investors. Why? Because MNTN looks to invest in late-stage private companies that have a good chance of going public.

Trouble is, that private company focus can come with a high degree of volatility. Just look at the fund’s performance over the past two years. During this period, MNTN shares fell almost 70% from their peak before rebounding 39% in dollar terms in March alone. Not for those with a nervous disposition then, but as Tempus writes: “There is much to like in its underlying portfolio.”

The portfolio companies are growing – the latest full-year results highlighted how the top 20 companies posted overall revenue growth of 40% and 40%+ gross margins. The top-five holdings (SpaceX, Wise, Affirm, ByteDance and Bending Spoons) are all cash generative – three are profitable. And the average cash runway (how much time a loss-making company has before it runs out of cash) is over five years – 90% of the portfolio has over 12 months’ cash runway.

As for the “meaningful diversification” the fund provides, it’s worth going back to the opening lines of Tempus’ tip: “Companies are staying private for longer. In 1980, the median age of a business at flotation was six years. Today it is ten. By the time these businesses hit the public markets, investors have missed out on some of their best growth spurts.” There you have it, MNTN allows sophisticated investors to participate in pre-IPO growth spurts.

This is Money: JPMORGAN AMERICAN: Thinking big… £1.8bn trust built around America’s mega stocks
JPMorgan American’s (JAM) turn to get the once over from This is Money’s Jeff Prestridge. Understandable after the fund clocked up a +36% return over the past year. While much of the strong performance is down to JAM’s exposure to 40 mega-cap growth stocks and the buzz surrounding AI, the fund is no one-trick pony. For as well as holding its fair share of growth names such as tech giants Microsoft and Nvidia, JAM also invests in stocks that represent outstanding long-term value for money – names here include oil and gas company EOG Resources and healthcare giant Johnson & Johnson.

Growth and value stocks held side by side – JAM is style-agnostic. The article goes on to quote Felise Agranoff, one of four managers, who describes JAM as “a blend of our very best investment ideas. We’re not wedded to any one investment style which means we can find opportunities right across the market.’” Speaking of the fund managers, one of the team Jonathan Simon is due to retire next year but, according to the article, “the impact on shareholders will be minimal.” Not because Simon won’t be missed but, as Agranoff says, “We have a deep investment bench here”.