FYI:
Regards,
Ted
The search for income became a bit more challenging this week after the Federal Reserve lowered its benchmark short-term interest rate by a quarter of a percentage point to a range between 2% and 2.25%. This first rate cut since 2008 was driven by concerns about slowing growth overseas, trade tensions and low inflation here. Fed Chairman Jerome Powell characterized it as a “mid-cycle adjustment,” not “the beginning of a long series of rate cuts,” which would occur if they saw “real economic weakness,” which he added is “not what we’re seeing.”
Who is carrying on the traditions of today’s great investors? When you are investing in a fund with an impressive track record and distinctive philosophy and approach is there any guarantee that those qualities will continue with the next generation?
We recently launched a new series on “Next Generation Investors” on WEALTHTRACK to introduce the younger portfolio managers sharing management responsibilities with some legendary investors.
If you were able to watch it you know that our premiere episode was an exclusive with Bill Miller and Samantha McLemore, the Co-Portfolio Manager of his flagship Miller Opportunity Trust fund which has beaten the market and its mutual fund competitors since the market bottom in 2009.
McLemore started working with Miller right out of college and has been working in a portfolio management capacity with him since 2008.
Miller is the Founder, Owner and Chief Investment Officer of Miller Value Partners, a firm he founded in 1999 while working at Legg Mason, but took over completely in 2017. Miller is still the only mutual fund manager to have beaten the market for 15 consecutive years, a record unlikely to be broken anytime soon.
This week we have another exclusive with Miller, but this time with the Co-Portfolio Manager of a very different and younger fund. This fund is a family affair. Miller’s Co-Portfolio Manager is his son, Bill Miller IV, known in the firm as “Bill Four”.
The fund is Miller Income fund. It was launched in early 2014 and is still relatively small with around $200 million in assets. The largest investors are the Millers.
Although the Income Strategy has done well since its 2009 inception, the mutual fund has a mixed record in its 5-year existence, outperforming its high-yield benchmark in up markets, a better than 16% advance in 2017 for instance, versus the benchmark’s 7 and a half percent gain, but declining more in down markets, off 8% in 2018 vs. a decline of a little over 2% for the benchmark.
Prior to joining his dad as a portfolio manager in Miller Value Partners’ Income Strategy, the younger Miller worked as an analyst focusing on high yielding securities at Legg Mason Capital Management, got his MBA from the Tuck School at Dartmouth, and was an analyst at McKinsey & Company.
We discussed how Bill IV’s investment style differs from his father’s, and how they work as a team to find high income at value prices, a task even more challenging with the Fed’s interest rate cut this week.
As usual, this week’s program is available to our PREMIUM subscribers immediately. Plus, in our online exclusive EXTRA feature, both the Millers tell us about the books that have had the greatest influence on their investing careers – here is your recommended summer reading list!
Thank you for watching. Have a great weekend, and make the week ahead a profitable and a productive one.
Best regards,
Consuelo
Video Clip:
M* Snapshot LMCJX:
https://www.morningstar.com/funds/xnas/lmcjx/quote 
