Miguel Oleaga, portfolio manager of the Thornburg Global Opportunities fund, says Alphabet Inc is the company he would hold for the next ten years, arguing that its share price does not fully reflect the strength of its earnings growth even as many technology stocks linked to artificial intelligence trade at record valuations.
Oleaga was speaking to This is Money's "I'm a fund manager" series, in which the website asks senior investment managers each month how they invest their own money, where they see opportunities over the next year and decade, and which pitfalls to avoid.
Thornburg Global Opportunities is a $1.9billion fund that invests worldwide, with 32 per cent of its holdings in the US, 25 per cent in the eurozone and a similar proportion in Asia. Its largest holdings include Samsung Electronics Co Ltd, Taiwan Semiconductor Manufacturing Company Limited (TSMC) and Alphabet Inc.
The fund has returned 15 per cent for investors so far this year, and has averaged an annual return of 11.68 per cent since it launched more than 20 years ago, outperforming its benchmark, the MSCI ACWI Index.
Why Oleaga backs Alphabet and TSMC
Asked which single company he would invest in for the next decade, Oleaga named Alphabet. "It combines several things we look for: a very strong competitive position, multiple sources of earnings growth, substantial financial resources and exposure to some of the most important secular trends in technology and AI," he said.
He added: "What makes it particularly interesting to us is that, unlike many companies associated with AI, we don't think the valuation fully reflects the breadth and durability of its earnings opportunities."
For the next 12 months, Oleaga picked TSMC. "It's difficult to find a company with a stronger position in the global semiconductor ecosystem, and we continue to see significant demand from AI and other areas of advanced computing," he said, adding that the fund was "buying a high-quality business where we believe the growth outlook remains attractive relative to the valuation." TSMC was among the portfolio's contributors in the recent period.
Semiconductors drive the fund's best returns
Asked which holding had delivered the best returns, Oleaga pointed to the semiconductor sector rather than a single stock, naming TSMC and Samsung Electronics as important contributors. "We backed them because they are exceptionally well positioned in a critical part of the global technology supply chain, but also because we were able to buy them at valuations that we believed did not fully reflect their long-term earnings potential," he said.
Samsung Electronics is the fund's largest holding in South Korea, which made up about 7.5 per cent of the portfolio as of 30 June. Oleaga said Samsung gave the fund exposure to long-term growth in semiconductors and AI "while still fitting our discipline around valuation."
Watching for a market correction
Oleaga said it was hard to predict when markets might correct or crash, but pointed to warning signs including high valuations combined with high expectations, a combination he believes is present in US equities. As a result, the fund is underweight the US relative to its benchmark.
"We are certainly conscious of the risk that expectations around AI become excessive, but our thesis is not dependent on assuming that every dollar of AI investment will generate attractive returns," he said. The portfolio's weighted-average 2026 price-to-earnings ratio is 12.9 times, compared with 18.8 times for the MSCI ACWI, which he said allowed the fund to participate in AI growth "without paying the market's highest prices for it."
Looking beyond the US
Oleaga said he would not frame the strategy as moving away from the US, but as recognising a broader global opportunity set. He said the US remained home to many exceptional companies, but that valuation differences across markets were significant, with compelling opportunities in Europe and Asia that receive less attention. Only about a third of the portfolio is invested in US equities, with substantial exposure to Europe, South Korea and Taiwan.
Gold, bitcoin and property
The fund does not invest directly in gold, and Oleaga said he could not comment on its merits. He said buying market-leading businesses with strong competitive positions and opportunities to reinvest, bought at attractive valuations, could provide similar durability, pointing to the fund's downside capture of 79 per cent over the last five years.
Oleaga also does not invest personally in bitcoin or other cryptocurrencies. "It is simply not an area of focus for us," he said, adding that outside of clients' capital, the fund's time was its most valuable asset and it had "yet to identify a framework we can apply consistently in the crypto space."
The fund does not invest directly in property either, though it has held housing and real-estate-related shares and has been reducing that exposure. Oleaga said real estate was sensitive to affordability, and that current interest rate trends combined with demographics were "generally unfavorable."
South Korea and the case for active management
Oleaga named South Korea as the market offering the best value, saying it provides exposure to "world-class technology and semiconductor companies" at valuations considerably more attractive than comparable US businesses.
He argued that active management earns its place over a passive index fund because Thornburg's process aims to identify where the market is mispricing individual businesses. The portfolio trades at roughly 12.9 times estimated earnings versus 18.8 times for the MSCI ACWI, he said, while its holdings have been growing revenues notably faster than the index. Over the 12 months to June, the fund returned 29.49 per cent against 23.67 per cent for the MSCI ACWI, though Oleaga cautioned that such outperformance would not be repeated every year.
Investing for the long term
Asked how he would invest a £100,000 inheritance as a 25-year-old with no other assets, Oleaga said he would put it into global equities. "Compounding is a magical thing," he said, adding that buying good businesses at good prices over a long investment horizon could create attractive value over time. He said global markets rarely moved in lock step with one another, creating pockets of mispricing that a global mandate could exploit wherever they arose.
