John Pattullo Co-Head of Strategic Fixed Income | Portfolio Manager
John Pattullo, Co-Portfolio Manager of the Henderson Diversified Income Trust, provides an update on the Trust, highlighting performance over past year, areas where he is finding opportunities within the bond market, the current inflation debate, and provides an outlook for the coming months.
Our commitment to “sensible income” means that we will stick to the knitting and continue to focus on better quality, higher yielding, less cyclical businesses which have sustainable revenues in the post COVID era.
As economies have reopened, it is not surprising that inflation has ticked higher, what has been surprising, however, is the severity of global supply chain issues, bottlenecks, and shortages in the labour market.
The outlook for the coming months remains uncertain due to a number of factors: credit spreads remain tight; inflation remains high, and central banks have begun reducing stimulus.
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.
The policies of a central bank aimed at influencing the level of inflation and growth in an economy. It includes controlling interest rates and the supply of money. Monetary stimulus refers to a central bank increasing the supply of money and lowering borrowing costs. Monetary tightening refers to central bank activity aimed at curbing inflation and slowing down growth in the economy by raising interest rates and reducing the supply of money.
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. Any securities, funds, sectors and indices mentioned within this article do not constitute or form part of any offer or solicitation to buy or sell them.
Past performance is not a guide to future performance. 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.
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.
If a trust's portfolio is concentrated towards a particular country or geographical region, the investment carries greater risk than a portfolio diversified across more countries.
Higher yieldings 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.
This trust is suitable to be used as one component in several in a diversified investment portfolio. Investors should consider carefully the proportion of their portfolio invested into this trust.
Active management techniques that have worked well in normal market conditions could prove ineffective or detrimental at other times.
The trust could lose money if a counterparty with which it trades becomes unwilling or unable to meet its obligations to the trust.
The return on your investment is directly related to the prevailing market price of the trust’s shares, which will trade at a varying discount (or premium) relative to the value of the underlying assets of the trust. As a result losses (or gains) may be higher or lower than those of the trust’s assets.
The trust may use gearing as part of its investment strategy. If the trust utilises its ability to gear, the profits and losses incured by the trust can be greater than those of a trust that does not use gearing.
All or part of the trust's management fee is taken from its capital. While this allows more income to be paid, it may also restrict capital growth or even result in capital erosion over time.