Deliberately different
Laura Foll, Co-Fund Manager for Henderson Opportunities Trust, discusses the Trusts recent performance and portfolio activity, highlighting the stock specific drivers behind the Trust outperforming its benchmark in the final quarter of 2020. Laura also explains why she is positive on the UK market and why recent M&A activity demonstrates that there is value to be found in the UK. Furthermore, Laura explains how the Trust moves “deliberately differently” to the broader UK equity market and why this Trust is perfect for those looking to diversify.
Glossary
The Alternative Investment Market (AIM): a sub-market of that is designed to help smaller companies access capital from the public market. AIM allows these companies to raise capital by listing on a public exchange with much greater regulatory flexibility compared to the main market.
Diversification: risk management strategy that mixes a wide variety of investments within a portfolio
Hurdle rate: the minimum rate of return on a project or investment required by a manager or investor
Mergers and acquisitions (M&A): the process of one company combining with one another. In an acquisition, one company purchases the other outright. A merger is the combination of two firms
Valuation discount: the deficiency in value that a buyer estimates for a company compared to its peers in the same industry
Yield: the earnings generated and realized on an investment over a particular period of time.
These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.
Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
The information in this article does not qualify as an investment recommendation.
Marketing Communication.
Important information
Please read the following important information regarding funds related to this article.
- If a Company's portfolio is concentrated towards a particular country or geographical region, the investment carries greater risk than a portfolio that is diversified across more countries.
- Some of the investments in this portfolio are in smaller company shares. They may be more difficult to buy and sell, and their share prices may fluctuate more than those of larger companies.
- This Company is suitable to be used as one component of several within a diversified investment portfolio. Investors should consider carefully the proportion of their portfolio invested in this Company.
- Active management techniques that have worked well in normal market conditions could prove ineffective or negative for performance at other times.
- The Company could lose money if a counterparty with which it trades becomes unwilling or unable to meet its obligations to the Company.
- Shares can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
- The return on your investment is directly related to the prevailing market price of the Company's shares, which will trade at a varying discount (or premium) relative to the value of the underlying assets of the Company. As a result, losses (or gains) may be higher or lower than those of the Company's assets.
- The Company may use gearing (borrowing to invest) as part of its investment strategy. If the Company utilises its ability to gear, the profits and losses incurred by the Company can be greater than those of a Company that does not use gearing.
Specific risks