Jamie Ross, Portfolio Manager of Henderson EuroTrust, delivers an update on the Trust highlighting the key drivers of performance over the month of April.

April was a positive month for relative performance which was pleasing in the context of the style-skew of the market, with MSCI Europe Growth declining by 1.9% during the month and MSCI Europe Value rising 0.9%1. This was a very difficult environment for our quality-growth biased strategy, and we managed to outperform largely due to positive earnings releases from a number of our companies.

On a stock-specific basis, our stronger performing positions included Novo Nordisk, Bawag and Sanofi. Novo Nordisk, a very high-quality company, has managed to buck the trend of the derating of quality/growth by delivering very strong Q1 numbers, which forced them to increase full year guidance. Bawag is also trading very strongly and remains our favoured bank holding (a rare example of a bank able to compound shareholder value over time). Finally, Sanofi reported strong results as well as benefitting from its cheaper valuation when compared to other high-quality pharma companies. Our biggest detractors in April, included Allfunds, Kion and SIG. Allfunds is a high-quality, high-return platform business that we see substantial long-term compounding potential in. However, in an environment where growth companies are selling-off and market levels falling (they are paid basis points of assets under administration), the shares have suffered. Kion has a very attractive warehouse automation business and a less attractive short-cycle industrial trucks business; the latter is being hurt by inflationary cost pressures. SIG, the maker of aseptic packaging, has sold off almost entirely for style reasons (it is a quality, high-return, defensive company) as far as we are concerned.

We have traded very little in April, with no new positions.

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.

1 Source: Bloomberg as at 30/04/22