There are people who like their job, and then there are those who love their job.
Colin Morton, investment director and UK equity manager at Franklin Templeton Investments, clearly falls into the latter category.
So much so that he freely admits to being a “bit sad” and checking the markets in the evening, as well as catching up on results and work while on holiday.
He says: “The great thing about this job is the flexibility. There isn’t a set timetable where you always have to be in at 7am and stay till 9pm.
“The other side is – and it’s not because you have to do it, but you want to do it – is that when you’re on holiday or doing things it’s very difficult to say I’m not going to look at that for a week. That would be more stressful than checking all the time.”
He argues that not knowing anything that is going on would mean too much catching up on what results had been missed, and any industry activity.
“The fact you have the ability now with Blackberries and iPhones and other technology to see what has been happening... I’d much rather do that and catch up,” he says.
“It is quite sad. Even at night I’d be on the computer or phone checking, but I actually enjoy doing it.”
Although fund management was not always Mr Morton’s dream job, his first role as a trainee stockbroker at Wise Speke, in Newcastle, sparked his interest and sowed the seeds for his future career.
“Really early on I realised it was something that did interest me. I started very junior, but even then I was trying to put together my own portfolio,” he recalls.
“A few of the guys I worked with and I would do a lot of research on these companies. It was obviously pre-internet, so we’d look at newspapers and things called Extel cards, which told you all you needed to know about the company. And what I tended to get involved in was really quite small companies.”
He adds: “Obviously, when you don’t have much money and you’re trying to have a bit of fun when you’re younger, you don’t want to be buying big blue-chip companies. You want to have a bit more fun with the smaller companies and that’s really how I got into it. It was a bit of a bug after that and it is just something I’ve done ever since.”
In his 30-year career, Mr Morton has always stuck to the UK and has no ambitions to move into a different region, noting that his background and mentors at his first job made UK equity investing the natural choice.
He says: “From very early on I was exposed to UK equities all the time. I knew about international and asset allocation, but it’s not anything I got into. I’ve always been a UK manager.”
In fact, having managed the Franklin UK Equity Income fund since 1995 – when it was a BWD-branded fund that then became Rensburg, and then Franklin – he is now the longest-serving UK equity income manager at 20 years since the departure of Neil Woodford from Invesco to start up his own firm.
He explains: “The track record is the same on the funds I’m running now as we’ve only changed the fund name. They are still run the same as they’ve always been, just with a different owner.”
One of the highlights of his career so far has been the loyalty of his team as they share a working relationship spanning at least one decade if not more, while the move to Franklin in 2011 has only helped the group dynamics.
Mr Morton comments: “We’ve become the UK arm for Franklin Templeton, but the way [the company] works is that there isn’t a directive from the top, there is no house view. It is structured with all these local asset managers, and we really run money how we’ve always run it. That was very important to us.”
Meanwhile, the biggest challenge has been adapting to the changing market environment, having started his career almost at the beginning of the bull equity market in the early 1980s.
“Your career is really defined by what you get used to in your working life,” he says.
“I started in the early 1980s and then the next 15 years were really good. But all my mentors were miserable, dour people as they’d been through the 1960s and 1970s. When I joined all I had was great equity markets, but my mentors had had a really horrible 13-15 years.
“But now it is almost [as if] the period from 1982-99 was exceptional. You didn’t think that at the time because if it’s what you get used to, then you accept it as the norm if it goes on for 15 years.
“But if you go through history, the real return from UK equities is 4.5-5 per cent a year. So the 1982-99 period when inflation was 4-5 per cent and the market was doing 15 per cent was an exceptional period of equity performance.”
He suggests the performance in the last 10 years has been closer to the longer-term norm, and although the UK is improving there is still a long way to go, particularly on the issue of debt – both personal and government.
“The UK is sitting there with £1.5trn of outstanding debt, but the good news is we are able to finance this at levels we wouldn’t have thought possible previously,” he says.
“Obviously the risk is that we have to put the interest rate up for whatever reason and more normal things start happening, such as inflation coming back.”
He adds: “Things are better than they were and we seem to be muddling through, but there is still lots to worry about. You don’t feel relaxed; we’re not out of the woods yet. There are still many things to be resolved and I think it will take a long time.”
And when he says “long”, he suggests that looking back to the 1950s and 1960s, which saw prolonged periods with low inflation and low interest rates, the situation now could last decades rather than years.
“None of us are quite accepting that this is [the case]. We’ve had five or six years [of this environment], but I wouldn’t be surprised if it was a 20-year thing to allow the deleveraging to happen in order to try and get things sorted out. We could be in this environment for a lot longer.”
In the meantime, the focus for Mr Morton and his team is to build up the UK business, noting that the pension reforms offer a big opportunity for income-related offerings.
“We don’t need to launch any more products. What we need to do and what we are hoping to do is to grow the products we’ve got at the moment,” he says.
“Income and income-producing growth products will do well, but the difficult part will be the education process between our industry and the guy in the street.
“It is hard to tell people not to worry about their capital, especially as you can have the capital on a platform and you can see it every day and what it is doing. So people can’t help but worry about daily or monthly movements.
“Even though we tell clients not to be short term, we then produce all this data on the short term,” he laughs.
But he adds: “I don’t know how long it will take to take off, but I think we’ll look back in a few years and see these types of products are a much bigger part of retirement planning than they were previously.”
CV
Colin Morton
2011 – present
Vice-president, manager,
Franklin Templeton Investments
2000 – present
Manager, Rensburg UK Blue Chip Growth Trust (now Franklin UK Blue Chip fund)
1995 – present
Manager, Rensburg UK Equity Income Trust (now Franklin UK Equity Income fund)
1991 – 2011
Investment manager, Rensburg
1988 – 1991
Private client executive, Rensburg
1983 – 1988
Trainee stockbroker, stockbroker, Wise Speke & Co
