Miguel Oleaga, portfolio manager for the Thornburg Global Opportunities fund, believes that Alphabet, the parent company of Google, remains undervalued despite a generally expensive U.S. market. He highlighted Alphabet's strong competitive position, diverse growth avenues, significant financial resources, and exposure to key technology and artificial intelligence (AI) trends as reasons for his optimism.
Oleaga's $1.9 billion fund, which has a 32% allocation to U.S. holdings, aims for long-term value by investing in companies with durable competitive advantages and attractive entry points. The fund has achieved an average annual return of 11.68% since its inception over 20 years ago, outperforming its benchmark, the MSCI ACWI Index.
While Alphabet is a top long-term prospect, Oleaga identified Taiwan Semiconductor Manufacturing Company (TSMC) as a key investment for the next 12 months. He pointed to TSMC's dominant position in the semiconductor industry and sustained demand from AI and advanced computing as drivers of growth. Both TSMC and Samsung Electronics have been significant contributors to the fund's performance due to their critical role in the technology supply chain and favorable valuations.
Oleaga expressed caution regarding the broader U.S. equity market, noting that high valuations and elevated expectations, particularly around AI, have created an unfavorable risk-reward balance. The Thornburg Global Opportunities fund's weighted-average price-to-earnings (P/E) ratio for 2026 is projected at 12.9x, compared to 18.8x for the MSCI ACWI, indicating a strategy of participating in AI growth without overpaying.
The fund manager also advocates for a global investment approach, recognizing compelling opportunities in Europe and Asia, such as South Korea, where technology companies like Samsung offer exposure to AI and semiconductor growth at more attractive valuations than their U.S. counterparts. South Korea represented approximately 7.5% of the portfolio as of June 30.
Oleaga steers clear of volatile assets like Bitcoin, focusing his team's resources on areas where their security selection process has historically added value. He views real estate with caution due to current interest rate trends and demographic factors, and has been reducing the fund's exposure to housing and real estate-related stocks.
For a young investor, Oleaga would recommend global equities, emphasizing the power of compounding and the ability to find mispriced assets across different international markets. His investment philosophy centers on acquiring quality businesses at reasonable prices, a strategy he believes offers durability and attractive long-term value.