VALUE INVESTING WITH AN EDGE
Our strategy has been and will remain consistent: we attempt to buy companies whose shares trade at a substantial discount to our assessment of intrinsic value and to hold those shares long-term.
At Miller Value Partners, we think and invest differently. We believe that our best investment opportunities come from a behavioral edge, while other investors look for an informational advantage. We value research from uncommon sources to help us understand the market as a complex adaptive system.
OUR INVESTMENT APPROACH
Our investment approach revolves around five main principles:
We value businesses by looking at a combination of fundamentals, strategy, peers, management and capital allocation to determine what a business is worth. We then compare our assessment of intrinsic value to the current price and invest when we believe the intrinsic value is significantly higher than the current price. We also translate observable market prices into embedded expectations for specific fundamentals and determine whether those expectations are reasonable.
We believe that investors are increasingly taking a short-term view and trading stocks from quarter to quarter. We focus on factors that are central to long-term performance throughout our process. Investing with a longer time horizon plays a significant role in what we view as our competitive edge.
We look for investment opportunities during periods of uncertainty, typically investing in businesses, industries and sectors that are out of favor with current market sentiment. We think there are three sources of edge in markets – informational, analytical and behavioral. The most enduring of these three is behavioral, as humans tend to react emotionally, especially during abnormal and volatile times. As a result, we tend to see the greatest investment opportunities when markets are in a state of panic.
Intellectual curiosity, adaptive thinking and creativity are important parts of our investment process. Our team stays current with numerous nontraditional resources, such as academic and literary journals in the sciences. We have also been involved in the Santa Fe Institute for more than 20 years and recently became involved with the London Mathematical Society. Incorporating nontraditional inputs into our research and process allows us to view businesses and situations from perspectives that others may not.
INCOME
Miller Income Fund
Not your traditional income fund. Flexibility allows Bill Miller IV to build a portfolio focused on generating income while also preserving the potential for capital gains by investing across capital structures, asset types and geographies.
PORTFOLIO MANAGER
Bill Miller IV, CFA, CMT
- Named Miller Value Partners CIO in 2023
- Has managed Income Strategy since its inception in 2009
- Previously at McKinsey & Company
- Earned his CFA designation in 2011
- MBA from the Tuck School of Business at Dartmouth and BA in Economics from Tufts University, Phi Beta Kappa and magna cum laude
We spend our time trying to understand the environment, not forecast it. By observing the path of the economy and by studying industries and companies, we hope to be able to put together a portfolio of stocks trading at large discounts to what those companies are worth. If we are right, over time the market price will tend to converge on business value. – Bill Miller
Mutual fund investing involves risk. Principal loss is possible. An issuer may perform poorly, and therefore, the value of its securities may decline, which would negatively affect the Funds. Derivatives involve special risks including correlation, counterparty, liquidity, operational, accounting and tax risks. These risks, in certain cases, may be greater than the risks presented by more traditional investments. The Opportunity Trust Fund may also use options, which have the risks of unlimited losses of the underlying holdings due to unanticipated market movements and failure to correctly predict the direction of securities prices, interest rates and currency exchange rates. The investment in options is not suitable for all investors. The Funds may use leverage which may exaggerate the effect of any increase or decrease in the value of portfolio securities or the Net Asset Value of the Funds, and money borrowed will be subject to interest costs. Investments in debt securities typically decrease in value when interest rates rise. The Funds are non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Funds are more exposed to individual stock volatility than a diversified fund. This risk is usually greater for longer-term debt securities. The value approach to investing involves the risk that stocks may remain undervalued. Value stocks may underperform the overall equity market while the market concentrates on growth stocks. The Funds may invest in Illiquid securities which involve the risk that the securities will not be able to be sold at the time or prices desired by the Funds, particularly during times of market turmoil. The Funds invests in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks are greater in emerging markets. Small- and Medium-capitalization companies tend to have limited liquidity and greater price volatility than large-capitalization companies. Investing in commodities may subject the Funds to greater risks and volatility as commodity prices may be influenced by a variety of factors including unfavorable weather, environmental factors, and changes in government regulations. Investments in Real Estate Investment Trusts (REITs) involve additional risks such as declines in the value of real estate and increased susceptibility to adverse economic or regulatory developments. The Funds may make short sales of securities, which involves the risk that losses may exceed the original amount invested. Investing in ETFs are subject to additional risks that do not apply to conventional mutual funds, including the risks that the market price of the shares may trade at a discount to its net asset value (“NAV”), an active secondary trading market may not develop or be maintained, or trading may be halted by the exchange in which they trade, which may impact a Funds ability to sell its shares. Investment by the Miller Income Fund in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities. Investments by the Miller Income Fund in asset backed and mortgage backed securities include additional risks that investors should be aware of such as credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. The Miller Income Fund may invest in MLPs which are subject to certain risks inherent in the structure of MLPs, including complex tax structure risks, the limited ability for election or removal of management, limited voting rights, potential dependence on parent companies or sponsors for revenues to satisfy obligations, and potential conflicts of interest between partners, members and affiliates.
The Miller Value Funds are distributed by Quasar Distributors LLC