Ben Yearsley: Midas can rediscover its winning touch

It is always interesting to see fund managers' reaction to a period of poor performance. It either leads to obstinacy and a period of "sticking to their guns", or to a period of soul-searching and an admission that changes need to be made. With Midas Balanced Growth and Midas Balanced Income it fell into the latter camp.

For a number of years Midas was the company no one had heard of apart from a select few in the City. Founded by four partners, including Simon Edwards and Alan Borrows, Midas started life managing money for the Merseyside pension scheme, specialising in multi-asset investing. They set out to be the antithesis of a tracker fund. If they liked something, regardless of what it was, they invested in it. Government bonds, equities, overseas equities, fixed interest, property, structured products, alternative assets – you name it, they probably considered it.

The funds were successfully managed by Edwards and Borrows for a number of years, and performance up until 2007 was excellent. So much so they attracted a wider following. The combination of top performance and a diversified approach was clearly a winning one.

In the past, diversified portfolios have been able to weather recessions reasonably well, so in theory the funds should have been well-equipped to weather the credit crisis of 2007-08. Yet this was no ordinary crisis. Pretty much every asset class fell sharply, and in hindsight it was evident that the managers were carrying too much risk. The more esoteric holdings in the fund suffered from a lack of liquidity, and years of hard work and top performance were undone in the space of a few turbulent months.

In addition to this difficult period of performance, there was the potential upheaval of a merger of the business with Miton, another niche fund management house, to ultimately create MAM Funds.

At Hargreaves Lansdown we had always held both companies in high regard, and each was a successful, profitable business. However, as part of the merger process, a large amount of debt was taken on at precisely the wrong time.

Turn the clock forward to today and I am pleased to say that these issues seem to be over. After a fresh round of financing sought by the new managing director, Gervais Williams, the former smaller companies fund manager at Gartmore, the group is on a sound footing and highly focused.

The most recent chapter in this potted history of Midas is the decision of Simon Edwards to step down to pursue other interests. This is undoubtedly a blow because Borrows and Edwards have been the driving force of Midas over the years. Indeed, the two were co-managers of these funds. However, the appointment of Simon Callow as lead manager on Midas Balanced Growth, while Alan Borrows takes full charge of the Income fund, is a satisfactory outcome for investors. Whilst relatively unknown, Callow has been at Midas for nearly six years and his experience, combined with Borrows and the remaining Midas team, should bode well for the future. They also have the Reading-based Miton team, with whom they can share ideas and opinions on markets, funds and investments, as well as Gervais Williams, who adds a new dimension with his smaller company experience.

Arguably, Midas was the first true multi-asset fund management house, and for a long time it was the best. There are now many imitators, but it is very difficult being the master of all investments without ending up the jack of some, and I believe the Midas team are still one to back.

Going forward, Borrows admits that the funds won't be as racy as they were in the Noughties. Essentially they are looking to achieve consistent second quartile performance and returns of 7 per cent to 10 per cent per annum. Obviously there is no guarantee of this, but it is interesting to note the admission of the managers' shortcomings and desire to return to more consistent, less volatile performance.If the Midas team can deliver once more, these should be core additions to any portfolio for thelong term.

Ben Yearsley is investment manager at Hargreaves Lansdown, the asset manager, financial adviser and stockbroker. For more details about the funds included in this column, visit

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
premier league
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
people'I hated him during those times'
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
Dame Vivienne Westwood has been raging pretty much all of her life
peopleMemoir extracts show iconic designer 'felt pressured' into going out with Sex Pistols manager
Life and Style
fashionAlexander Fury's Spring/Summer 2015 London Fashion Week roundup
Arts and Entertainment
Lauryn Hill performing at the O2 Brixton Academy last night
musicSinger was more than 90 minutes late on stage in Brixton show
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
people''Women's rights is too often synonymous with man-hating'
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior BA - Motor and Home Insurance

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Market Risk & Control Manager

    Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Day In a Page

    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam