Remaining resolute amid market uncertainty
Jamie Ross, Portfolio Manager of Henderson EuroTrust, provides an update on the Trust, highlighting how he is navigating this volatile market environment, areas where he is finding opportunities, and how companies are dealing with higher input costs. Jamie also touches on what the war in Ukraine might mean for the energy transition.
- We are using this difficult environment for quality-growth stocks as an opportunity to move further toward this style bias. Simply put, we are finding opportunities to buy what we see as high-quality, long-term investments at reasonable valuations.
- Across the board, companies are experiencing margin pressure, stemming from higher labour, freight, and energy costs. However, quality companies with strong pricing power have been able to pass on these rising costs.
- Growth/quality stocks have struggled because the combination of high interest rates and inflation impacts the multiples which investors are willing to pay for these stocks. As the discount rate goes up, the valuations of these stocks go down.
6 minute watch
Please read the following important information regarding funds related to this article.
- 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.
- The trust may have a particularly concentrated portfolio (low number of holdings) relative to its investment universe and an adverse event impacting only a small number of holdings can create significant volatility or losses for the trust.
- Where the trust invests in assets which are denominated in currencies other than the base currency then currency exchange rate movements may cause the value of investments to fall as well as rise.
- 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.
- 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 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.