For financial professionals in the UK

Fund Manager December 2021 Commentary – Henderson EuroTrust

Jamie Ross, CFA

Jamie Ross, CFA

Portfolio Manager

13 Jan 2022
2 minute read

In December, the Trust had a disappointing month and we continued to struggle for performance.

This was very much a market led by value and cyclicality and our best performing positions included Unicredit, CHNi, Stellantis and Munich Re. From these four positions, the only thing worthy of stock-specific comment was the Unicredit Capital Markets Day. During this event, the new CEO, Andrea Orcel, laid out his medium-term intention to return the bank to a business capable of delivering a double digit return on tangible equity. If he is successful, we believe that this could potentially result in a substantial rerating of the equity from their current 0.4 to 0.5 x tangible book value trading range.

Our worst performing positions included Delivery Hero, Cellnex, Zur Rose and HelloFresh. These are all very much ‘growth companies’ and this was not the environment for these kinds of stocks to perform well. We retain our faith in Delivery Hero, which we see as capable of reaching profitability within 24 months, and Cellnex, which offers a defensive and growing stream of future cash flows. We have sold our position in HelloFresh which we see as more challenged over the next few years whilst maintaining a small position in Zur Rose.

We have repositioned the portfolio somewhat in recent months. In summary, we have been working to increase our cyclical exposure heading into 2022 (via companies such as SKF, Safran, Arkema and Total), we have reduced position sizing in our earlier-stage tech companies (Delivery Hero, Sinch and others) and we have balanced our sector exposure. The intention is to better position the portfolio to benefit from the post-Covid recovery whilst aiming for a more neutral cyclical/defensive tilt (we have been meaningfully overweight defensives) and a slightly more diversified portfolio (more stock specific risk, less factor/sector/thematic risk). As part of this rebalancing, and alongside other trades, we bought new positions in Total, Arkema and SAP in December whilst selling Hellofresh and RWE.

We will continue to retain balance in our exposures by considering two types of business for investment; those where we see high and sustainable returns that are undervalued by the market and those companies where we can see a material improvement in medium term business prospects.

Book value Expand

Value of an asset is its value on a company’s balance sheet; this may differ from its market value.

Cyclicality Expand

Companies that sell discretionary consumer items, such as cars, or industries highly sensitive to changes in the economy, such as miners. The prices of equities and bonds issued by cyclical companies tend to be strongly affected by ups and downs in the overall economy, when compared to non-cyclical companies.

Defensive stocks Expand

A defensive stock is a stock that provides consistent dividends and stable earnings regardless of the state of the overall stock market. There is a constant demand for their products, so defensive stocks tend to be more stable during the various phases of the business cycle.

Growth stocks Expand

Shares of a company which generally show above-average earnings and that are expected to grow at a rate significantly above the average growth for the market.

Return on tangible equity Expand

Return on tangible equity or ROTE is the net profit (after interest and tax) as a percentage of the (average) tangible equity or shareholders’ funds. Tangible equity is equity or net assets less intangible assets such as goodwill.

Value stocks Expand

Shares of a company that appear to trade at a lower price relative to the company’s fundamentals, such as dividends, earnings, or sales.

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.

Before investing in an investment trust referred to in this document, you should satisfy yourself as to its suitability and the risks involved, you may wish to consult a financial adviser. This is a marketing communication. Please refer to the AIFMD Disclosure document and Annual Report of the AIF before making any final investment decisions.
    Specific risks
  • 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.
  • The Company may have a particularly concentrated portfolio (low number of holdings) relative to its investment universe - an adverse event impacting only a small number of holdings can create significant volatility or losses for the Company.
  • Where the Company invests in assets that are denominated in currencies other than the base currency, the currency exchange rate movements may cause the value of investments to fall as well as rise.
  • 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.