Fund Manager August 2021 Commentary – Henderson Opportunities Trust
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During August, the Trust’s net asset value (NAV) grew 5.0%, outperforming a 2.7% rise in its FTSE All-Share benchmark and a 4.4% rise in its peer group, the AIC UK All Companies Sector.1 At the stock level, this outperformance was driven by a combination of takeover interest from private equity companies in software company Blue Prism, as well as good trading updates from companies such as Marks & Spencer, Vertu Motors and Next Fifteen Communications. We continue to be encouraged by what we are hearing from companies in trading updates; in many cases sales and earnings have recovered faster following the pandemic than management teams and the market were anticipating.
While the Trust’s NAV grew well during the month, the share price increase of 1.4% underperformed the rise in NAV of 5.0%, causing the discount to NAV to widen. We are not aware of a large seller of the Trust, and some (although not all) Trusts in the peer group have also seen their discounts widen during the quieter summer months. The Board continues to regularly review share buyback opportunities where they would be marginally enhancing to existing shareholders, and during the previous financial year bought back shares when the discount was greater than 15%. The Board continues to believe, however, that the best route to eroding the discount over time is investment outperformance.
1 Source: Henderson Opportunities Trust factsheet and Morningstar as at 31.08.2021
Net Asset Value (NAV) ExpandThe total value of a fund’s assets less its liabilities.
Private equity ExpandInvestment into a company that is not listed on a stock exchange. Like infrastructure investing, it tends to involve investors committing large amounts of money for long periods of time.
| Discrete year performance % change (updated quarterly) | Share price | NAV |
|---|---|---|
| 30/06/2020 to 30/06/2021 | 73.2 | 63.7 |
| 28/06/2019 to 30/06/2020 | -16.8 | -16.2 |
| 29/06/2018 to 28/06/2019 | -7.1 | -7.4 |
| 30/06/2017 to 29/06/2018 | 22.3 | 21.9 |
| 30/06/2016 to 30/06/2017 | 27.3 | 27.8 |
All performance, cumulative growth and annual growth data is sourced from Morningstar.
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.
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