Fund Profile

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Henderson EuroTrust. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
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Overview

Henderson EuroTrust (HNE) aims to deliver superior total returns from a portfolio of high-quality European (ex-UK) companies. After Tim Stevenson announced his retirement in 2018, Jamie Ross took over control and was named lead manager of the trust. He had been previously appointed deputy fund manager of HNE in March 2017 and then co-manager at the start of October 2018.

Jamie looks for high-quality, reliable companies, with the end goal of delivering consistent returns to investors. This involves looking for companies with strong market positions, sturdy balance sheets, consistent growth and quality management.

Jamie took over the portfolio in an unarguably challenging environment, with political and macroeconomic uncertainty swirling around Europe. However, so far in 2019 (to 31 October) the trust has outperformed, generating 20.16% NAV total returns relative to FTSE World ex-UK total returns of 17.5%. HNE has also outperformed both the AIC peer group average (by 2.3%) and the IA peer group average (by 4.3%) over the same period.

Due to this, Jamie looks as though he is on course to continue HNE’s impressive track record, which has now outperformed the benchmark in nine out of the last ten years. This impressive feat isn’t always recognised in the discount, which has been quite volatile over the past few years, ranging from a premium to a double-digit discount. The current discount sits at 9.2%, which is towards the bottom end of HNE’s historical range.

Kepler View

The consistency of outperformance in difficult markets – as well as those which have been more positive – is one of the hallmarks that differentiates Henderson EuroTrust from the crowd.

Jamie, who came to the helm at a particularly tricky time, has so far proved himself a worthy successor to Tim Stevenson. Although it is likely that Germany has entered a recession, whereas Italy has struggled to avoid recession and the cloud of Brexit continues to see investors shy away from the European region, Jamie has taken the negative investment environment in his stride, and performance this year has so far been strong .

This strong relative performance is yet to be reflected in the trust’s discount, which has widened in comparison to its one-year average. In fact, the trust’s discount of 9.2% sits well below the peer group average, despite HNE being one of the standout performers over the past one, three and five years. As such, there is a decent chance that HNE could re-rate, and the discount narrow. As such, whilst also getting exposure to some of the unique companies that Europe has to offer, the current discount is a potentially attractive entry point for investors.

bull bear
The new manager has started strongly, outperforming peers and the benchmark over 2019 so far
Jamie is a less experienced new manager without a long-term track record in European equities
A more concentrated portfolio offers the potential for strong alpha generation
Uncertainty continues to cloud investor sentiment towards Europe
Discount is at a historically wide level
Sterling strength could provide a headwind to NAV and dividend
Continue to Portfolio

Fund History

01 Dec 2021 Fund Analysis
HNE’s discount has widened recently despite its impressive risk/return profile…
06 Oct 2021 Slides and Audio: Henderson EuroTrust
Download the presentation and listen to the audio from our 'Now that's what I call a discount!' Autumn conference on 30 September...
23 Sep 2021 Now that's what I call a discount 2021!
For the second year running we examine trusts on discounts which, in our view, don't make sense...
09 Sep 2021 What next for European equities?
After a strong period for European equity markets, we ask whether this trend can continue…
10 Jun 2021 Green is good!
2021 will see billions dedicated to sustainable initiatives, which brings with it a host of possible investment opportunities...
28 Apr 2021 The next value opportunity?
Two of our analysts debate whether Europe's improving vaccination programme will be the next opportunity for investors in their pursuit of returns...
05 Mar 2021 Fund Analysis
Active re-positioning around the COVID-19 recovery means HNE continues to widen its outperformance….
16 Dec 2020 My haven’t you grown!
How sustainability has gone from zero to hero in 2020…
28 Oct 2020 Fund Analysis
HNE has outperformed in each of the three phases in markets this year, yet trades on a discount of 9.3%...
15 Oct 2020 Nice guys finish first
ESG has moved from hippy pipe-dream to corporate mainstream, but what is it really and where do we see opportunities?
29 Jul 2020 To be, or not to be (geared), that is the question
Gearing is part of the toolkit that trusts use to outperform OEICs. But how is it best implemented?...
05 Jun 2020 Deep impact
Audio and presentations from our conference this week, where fifteen of the world's best fund managers described a profoundly altered investment landscape...
13 May 2020 Braving the new world
Join 15 of the UK's best known fund managers at the Kepler Trust Intelligence Virtual Summit to find out how they see the world after the pandemic...
05 Feb 2020 The best form of defence
We look at the continued rise of passive funds, and find out how investment trust managers are countering it...
18 Dec 2019 The squeeze continues: how trust costs keep falling
As pressure on costs remains, we reveal which trusts have achieved the most significant reductions in 2019….
12 Dec 2019 Fund Analysis
The new manager is now outperforming, meaning HNE’s current discount is an interesting proposition…
26 Jun 2019 Measure for measure
In the first of a two-part series, we examine the tools investors can use to assess how active a manager actually is…
24 Apr 2019 Nothing compares to EU
Currently one of the financial world's most unloved regions, we look at the sectors that are unique to Europe and how the persistent pessimism has presented attractive opportunities…
24 Apr 2019 Fund Analysis
Henderson EuroTrust (HNE) offers a great opportunity for investors to diversify their portfolios and gain exposure to some of the unique companies that Europe has to offer...
03 Apr 2019 Nice guys finish first
We review the rise of ESG, its impact on investment trusts, and the various ways ESG has evolved in the trust world...
28 Nov 2018 Every cloud...
The endless grinding negativity of Brexit has driven investors away from Europe in scores, leaving rich pickings for opportunistic buyers...
26 Nov 2018 Fund Analysis
Having had the longest-tenured manager in the sector, a new manager is taking the reins and making some subtle changes to the portfolio.
07 Nov 2018 The Great British Buffett
New research claims to have identified the secret of Warren Buffett's success; we apply similar principles to find the UK's answer to The Sage of Omaha...
16 Oct 2018 The Investment Trust Advantage
Our recent conference for discretionary fund managers saw some of the UK's leading fund managers discussing the outlook for the world's major regions and asset classes...
30 May 2018 Forza Italia!
Recent weeks have seen Italy's rocky relationship with the EU thrust into the spotlight once again, but we think volatility for European equities may be a buying opportunity...
30 May 2018 Fund Analysis
This fund has the longest-tenured manager in the sector, with an impressive consistency of outperformance of the benchmark...
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