The Janus Henderson Global Natural Resources Fund seeks to achieve a total return after fees that exceeds the total return of the S&P Global Natural Resources Index (net dividends reinvested) in AUD over rolling five year periods.
Investment strategy & philosophy
The Manager's approach is to manage a high-conviction portfolio of quality natural resource stocks sensibly diversified by commodity, size, maturity and investment strategy together with a number of appropriately sized, risk-adjusted holdings in smaller, high growth companies.
The Fund is managed using a stock selection process primarily based on bottom-up fundamental company analysis utilising extensive specialist natural resources stock market expertise combined with geological, mining, energy, exploration and agricultural industry experience. This approach incorporates an understanding of project and resource company life cycles and an internal research effort that focuses on important valuation events such as the discovery, commissioning and expansion phases of good quality natural resource projects.
Stock selection includes screening for quality, valuation and growth and incorporates stress testing, identification of investment catalysts and trigger points and a final check to ensure that there is a high level of conviction and insight about the key reason(s) for including, maintaining or disposing of a stock in the Fund.
Top-down projections of future economic conditions are also used during portfolio construction to monitor and adjust exposure between key variables including commodities, currencies, geographic locations, company maturity, liquidity and size. This process aims to provide a risk framework incorporating concentration, diversification and liquidity guidelines, together with macro overlays, yet importantly ensuring that high conviction investment ideas can have a meaningful impact on overall portfolio returns.
This combined approach seeks to provide adequate portfolio liquidity and quality, appropriately sized stock positions and a diversified portfolio. Macroeconomic, commodity and political risk overlays are also used in the portfolio construction process.
The Fund uses the S&P Global Natural Resources Accumulation Index in AUD as its benchmark. Although the Manager is aware of the benchmark index weightings by individual major company, country, sector and sub-sector, the Manager focuses on investing in quality companies rather than selecting companies based solely on relative index weightings.
Furthermore, the Manager does not manage the natural resource portfolio to target a pre-determined benchmark tracking error or absolute volatility. The portfolio volatility and tracking error is the end result of the stock picking and portfolio process, not the starting point.