In this episode, Andrew Chiguri and Tom O’Hara, Portfolio Manager of Henderson European Focus Trust, reflect on 2021 and how the Trust navigated the tricky market environment. Tom also touches on the outlook for the coming year and highlights the key factors that might affect stock markets in 2022.

Key takeaways

  • John Bennett and Tom O’Hara, Portfolio Managers of Henderson European Focus Trust shifted the portfolio from focusing on the “industrial V-shape” and “recovery” plays in 2020, to “consumer reopening plays” to take advantage of the economic reopening in 2021.
  • Growth vs value dynamics have not behaved expected despite inflation looking less transitory. Growth stocks have rallied in 2021 – leading to stretched valuations – whilst value areas of the market have lagged.
  • Inflation remains an underappreciated risk, with several questions still be answered: will the supply-demand mismatches be resolved, will energy prizes stabilize, and will easing labour market frictions reduce wage pressures.
  • The outlook for 2022 looks encouraging as vaccines get more evenly distributed and economies open up. In addition, the market remains highly liquid and given the value/growth disconnect – there are pockets of value in certain sectors.

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