Henderson European Trust (HET)

Henderson European Trust (HET) is the product of the July 2024 merger of Henderson European Focus Trust (HEFT) and Henderson EuroTrust (HNE), and is co-managed by Tom O'Hara and Jamie Ross, the respective managers of the two trusts . In the Portfolio section we discuss how HET looks compared to its predecessors, but essentially it continues with the concentrated forty or so stock portfolio approach of both, homing in on companies the team see as global leaders. While there is currently a quality growth tilt to the portfolio, the team take a pragmatic approach to investing, and aren't bound by a particular investment style.

Tom and Jamie both have a track record of outperforming HET's benchmark and have worked together for several years within the 11-strong European equities team at Janus Henderson. The two predecessor trusts had a c. 50% overlap in portfolio immediately before the merger and since then they have made various changes, for example reassessing and reducing exposure to the luxury goods sector and more recently taking positions in some interest rate sensitive stocks in the utilities, telecommunications and REIT sectors.

HET trades at a c. 12% discount, in line with its five-year average, and a little wider than the peer group average of c. 9%. In July HET was promoted to the FTSE 250 Index, which could create additional demand for the shares in due course.

HET is primarily aimed at producing capital growth but nonetheless has an attractive 2.4% Dividend yield. The merger created changes to the timing of dividends in 2024, but the expectation is to return to a similar pattern established by predecessor HEFT. HET is currently geared just under 4%, with most of its long-term, low-cost Gearing deployed. Any additional gearing will be funded by short-term borrowings.