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
A new version of this profile is available. View Latest
Overview

Henderson EuroTrust (HNE) invests in a portfolio of European-domiciled companies, seeking to generate the maximum possible total return over the medium to long term. Jamie Ross took over from previous manager Tim Stevenson (who had been at the helm for over 25 years) in early 2019.

Jamie made a number of substantial changes to HNE’s portfolio in early November, having grown concerned around the stretched valuations of a number of ‘COVID-19 beneficiaries’ within the portfolio. His views on a post-vaccine recovery, combined with HNE’s priority scoring framework highlighting the valuation risks, led Jamie to sell out of a number of the expensive COVID-19 ‘beneficiaries’ and rotate into names which could benefit from the recovery.

This was the third such re-positioning during 2020, with the trust now having generated a 12-month NAV performance of 21.4%, nearly three times its benchmark’s 7.6% return, and nearly twice that of the peer group’s 11.5% NAV return. Since the start of his tenure in February 2019, Jamie has consistently outperformed his benchmark, providing investors with high alpha and a low beta of 0.7. This performance is not only evidence of Jamie’s ability as a manager, but the effectiveness of his investment process, which at its core remains unchanged under the new management.

HNE continues to trade at a discount, currently 8.4%. Though it has shown signs of narrowing recently, it still trades in line with the long-term average, and wider than the average discount of the peer group.

Analyst's View

In our view, Jamie’s navigation of the market during COVID-19 has been very impressive. Jamie’s recent changes to the portfolio ultimately reflect both his skill as a manager and his commitment to his investment process. This is evidenced not only by the returns and performance metrics HNE has generated over the last 6 months, but also performance in prior phases of the pandemic. HNE occupies an interesting place in the European sector, with the manager’s demonstrable willingness to have feet in both growth, and value camps – which potentially offers investors a useful core exposure relative to peers.

As a result of HNE’s performance, the discount at which it trades seems incongrous. While Jamie does not have the long track record many investors demand of a manager, his recent performance has surpassed many of his longer-tenured peers. Jamie has demonstrated his ability to generate returns through rapidly changing circumstances thanks to the ‘trial by fire’ he has faced over the last two years, and leaves us optimistic that he can continue to generate significant alpha.

That said, the change in dividend policy, no longer a progressive pay-out, may be unpalatable to income-seeking investors. Likewise, the short-term changes to the portfolio may have impacted HNE’s ESG credentials slightly – although Jamie does remain committed to sustainability as a theme. However, for total return-seeking investors, in our view, HNE offers one of the most promising strategies in the European sector.

Bull
Bear
Strong track record of outperformance versus peers and benchmark
“Vaccine” trade may move against HNE if Europe is forced into a prolonged lockdown
Successfully executed COVID-19 vaccine trade, evidenced by increased alpha since then
Recent trades have impacted HNE’s ESG score
Discount to NAV has remained wide relative to trust’s long-term history
Dividend is no longer progressive


Continue to Portfolio

Fund History

27 Jul 2022 Has the comeback begun?
Our analysts debate whether the market has fully priced in the current inflation and looming recession…
08 Jul 2022 Fund Analysis
HNE’s fund manager has doubled down on high-quality companies in the recent market rout, with the trust trading on a wide discount…
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) has a strong track record and the new manager shares all the hallmarks of his predecessor...
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, but some managers see rich pickings for those willing to take the risk...
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 fund managers in the UK with similar characteristics...
30 May 2018 Forza Italia!
Recent weeks have seen Italy's rocky relationship with the EU thrust into the spotlight once again, but apart from fresh volatility - how much has really changed?
30 May 2018 Fund Analysis
This fund has the longest-tenured manager in the sector, with an impressive consistency of outperformance of the benchmark...
View all

Welcome to Kepler Trust Intelligence

Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority.
Please enter a valid email address
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid email address
{{item.msg}}
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority. To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
{{item.msg}}
Please enter a company name
{{item.msg}}
Please enter a location name
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a platform
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a trust
{{item.msg}}
?
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
{{item.msg}}
Please select an option
{{item.msg}}
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
{{item.msg}}
Please enter your first name
{{item.msg}}
Please enter your last name
{{item.msg}}
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid password
{{item.msg}}
How will this information be used? Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase.
Our Website uses Cookies Cookies are small text files held on your computer. They allow us to give you the best browsing experience possible and mean we can understand how you use our site. Some cookies have already been set. You can delete and block cookies, but parts of our site won’t work without them. By using our website you accept our use of cookies. For further information please refer to the Kepler Privacy Notice.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.