In this video, Marc Pinto, Portfolio Manager on the Janus Henderson Balanced team, reiterates the flexibility and defensive focus of the strategy, giving a broad overview of recent moves towards higher-quality holdings, and readiness to re-evaluate positioning should market conditions change.

  Key Takeaways

  • The strategy has moved to a more defensive stance in recent weeks, to reflect the uncertain economic times.
  • The equity portfolio is focused on companies with strong cashflows, that are not overly dependent on capital markets. The fixed income sleeve has been shifted towards better
    quality debt.
  • Clearly there is a lot of uncertainty, but this is an excellent time for active management to prove its worth to investors.

 

 

Transcript

Given this environment and the great amount of uncertainty, we are fortunate to have the ability to adjust the equity and fixed income allocation. In the past few weeks, we have taken a more defensive stance in the strategy to reflect the uncertain economic times. We have remained very consistent to our process and philosophy in managing the strategy, which includes using asset allocation to position the strategy as best as possible given the current market conditions, focusing on high-quality companies in the equity sleeve, that generate cash and have strong balance sheets, and that [we believe] can withstand the inevitable economic slowdown that we know is coming.

And in the fixed income sleeve, also upgrading positions, from a quality standpoint. Managing the duration of the fixed income sleeve to best position us.

In these uncertain times, our focus on high-quality companies with solid balance sheets is as important as ever. Those companies who are not dependent on the capital markets for liquidity and funding should fare well and arguably come out of this downturn even stronger, because of their competitive position. These are really the companies we look at on a daily basis. Of course, we will continue to monitor the markets for opportunities, and when we see signs of recovery, we will clearly be making adjustments to the portfolio, as we have been, to position for the inevitable rebound.

In terms of our outlook, clearly there is a lot of uncertainty, and we are very much focused on the headlines that all of us are watching. Including the progression or lack of progression of the coronavirus, and the response from governments around the world, including the US, and any mitigating factors from a monetary and fiscal standpoint to blunt the impact on the economy, which we know is inevitable.

Having said that, we think this is an excellent time for active management. We are making real-time adjustments to the strategy, based on current news flow, and are re-evaluating our positions on a daily, sometimes even hourly basis. The team is well experienced – we have all seen difficult periods like this before, and we feel confident that we will be able to persevere through these difficult times.

As you can see, I am working from home, like most companies around the world are doing. Fortunately, with the benefit of technology, the team has been able to meet virtually many times per day. Thankfully, we have avoided any technical glitches. We have been able to meet via videoconference, and from my perspective, get the same benefits of seeing one another and conversing as if we were in the same room. So we’re very thankful to the progress in technology that allows us to do that.