Henderson EuroTrust 24 April 2019
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.
Henderson EuroTrust (HNE) aims to deliver superior total returns from a portfolio of high quality European (ex UK) companies.
Tim Stevenson retired from the team at Janus Henderson in February 2019 after more than two decades at the helm. Jamie Ross has taken over as the lead manager, after being appointed deputy fund manager on EuroTrust in March 2017 and then co-manager at the start of October 2018. Jamie joined Janus Henderson as a graduate in 2007, starting in European equities before moving to be a co-manager on the Henderson UK Alpha Fund (OIEC).
The investment process has not changed since the new manager took the reins, and his style is the same. Searching for good quality, reliable companies remains at the heart of the approach, with the end goal of delivering investors consistent returns. Jamie looks for companies that have strong market positions, strong balance sheets, consistent growth and quality management, and believes Europe is an excellent hunting ground to do so.
As Tim did, Jamie has biases towards particular sectors and the company’s largest overweight is towards the healthcare sector. Moreover, IT, communication services and industrials also represent significant portions of the portfolio. As well as looking at companies on a sectoral basis, the manager likes to look at companies based on three broad classifications; compounders, improvers and special opportunities.
The trust has an exceptional track record, and over the past nine calendar years the trust is yet to underperform the benchmark. With this said, Jamie has taken over the portfolio in a particularly challenging environment, with political and macro-economic uncertainty surrounding Europe. Although the trust was unable to generate positive returns over 2018, most of the losses have been recovered in the first quarter of 2019 and since the start of the year has generated 10.7% NAV returns. Alongside total returns the trust offers a, far from small, dividend. The manger aims to provide a growing level of income, and the trust currently yields 2.8%, well ahead of the weighted sector average.
Over the past few years we have seen the trust’s discount fluctuate greatly. As of April 2019 the trust has trading at a discount close to 10%, considerably wider than its one-year average of 8.5%. Currently, the AIC sector weighted average is 9.2%.
Fund History
