Henderson European Focus Trust plc: Half-Year Results 2023

Portfolio Manager, Tom O’Hara discusses the half-year results for Henderson European Focus Trust, including the key drivers of performance, areas where he is finding opportunities, energy market dynamics, and his outlook for European equities.

Tom O’Hara

Portfolio Manager

John Bennett

Director of European Equities | Portfolio Manager

19 May 2023
8 minute watch

Key takeaways:

The Company’s NAV total return rose by 22.8%, outperforming its benchmark (FTSE World Europe ex UK Index) by 1.1% and AIC European sector peers by 0.5%. The share price saw a great rise of 28.3%, this was largely due to the narrowing of the discount over the period.
Our semiconductor holdings (BE Semiconductor, ASM International, STMicroelectronics), Holcim and Kion contributed positively to performance. However, key detractors included Dutch insurer ASR Nederland, UPM-Kymmene and oil holdings (Shell and BP).
Asset-light’ was a posterchild of the last decade, courtesy of monetary abundance, non-existent inflation, and a still largely unipolar world order. ‘Asset-heavy’ will have renewed significance in the next. In this realm, we believe Europe has winners.

Disclaimers:

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.

Not for onward distribution. 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. 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. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change. Nothing in this document is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment. We may record telephone calls for our mutual protection, to improve customer service and for regulatory record keeping purposes.

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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.

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