For individual investors in the UK

Henderson International Income Trust Fund Manager Commentary – Q2 2022

Ben Lofthouse, CFA | Janus Henderson Investors
Ben Lofthouse, CFA

Ben Lofthouse, CFA

Head of Global Equity Income | Portfolio Manager

22 Jul 2022
3 minute read

Ben Lofthouse, Portfolio Manager of Henderson International Income Trust, delivers an update on the Trust, highlighting the key drivers of performance and portfolio activity over the quarter. Ben also provides his outlook for dividends in the coming months.


Global equity markets, as measured by the MSCI World Index, fell by 9.0% in sterling terms in the second quarter of 2022, mainly due to ongoing concerns about inflation, interest rate hikes and a rising risk of recession.¹ Market declines this year have driven all markets (except the US) to valuation levels below their averages since the early 90s. The Chinese market performed well towards the end of the quarter as lockdown measures eased while cyclical sectors and technology underperformed the broader market due to concerns about global growth.

Trust performance and activity

The portfolio’s focus on reasonable valuations, attractive dividends, strong cash flows and conservative balance sheets has helped protect capital somewhat over the period. The net asset value (NAV) total return (debt at fair value) was -2.2% and included a dividend payment of 1.8p per share.¹

The strongest performers were the energy sector holdings, driven by high oil and gas prices, and holdings in defensive sectors such as consumer staples, telecommunications and pharmaceuticals. Together, these sectors make up approximately 40% of the portfolio.

Companies perceived as cyclically sensitive were the most significant detractors to performance. The technology and consumer discretionary holdings in the portfolio were weak. In most cases, they continued to report strong results, and the fall is more down to investor sentiment. Dividend trends within the portfolio remained positive; the majority of companies increased their dividends year-on-year, and some have paid special dividends.

New positions initiated during the period included Deutsche Telekom, Mediatek, China National Building Material Co and Capital and Integrated Commercial Trust. Positions closed during the period included Quanta Computer, Panasonic, McDonalds, and ABB.


Sentiment has turned incrementally more negative regarding the outlook for global growth and demand, and equities are being rerated ahead of negative revisions from analysts. We think dividend paying stocks with low valuations relative to the market, strong cash flows and conservative balance sheets should be well placed to weather this environment. Growth in earnings is likely to provide less support to market valuations this year, while a focus on cash generative dividend paying stocks means that investors are being paid to wait during this period of high uncertainty.

¹Source: Bloomberg as at 30 June 2022

HINT June 2022 Glossary Expand

Cyclical stocks – 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 – 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.

Inflation – The rate at which the prices of goods and services are rising in an economy. The CPI and RPI are two common measures. The opposite of deflation.Valuation metrics -Metrics used to gauge a company’s performance, financial health, and expectations for future earnings eg, price to earnings (P/E) ratio and return on equity (ROE).

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
  • Higher yielding bonds are issued by companies that may have greater difficulty in repaying their financial obligations. High yield bonds are not traded as frequently as government bonds and therefore may be more difficult to trade in distressed markets.
  • The portfolio allows the manager to use options for efficient portfolio management. Options can be volatile and may result in a capital loss.
  • Global portfolios may include some exposure to Emerging Markets, which tend to be less stable than more established markets. These markets can be affected by local political and economic conditions as well as variances in the reliability of trading systems, buying and selling practices and financial reporting standards.
  • 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.
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