Janus Henderson Investors (JHI) has a long legacy of investing in North American equity. Janus Capital Group was a US-focused investment house prior to its merger with Henderson Global Investors in 2017.
JHI currently has $183bn Americas equities AUM. Our North American equity team emphasises sector-based expertise and has 35 analysts split into 7 sector specialisms. As of August 2024, the team is managing The North American Income Trust.
How we find stocks we like in North America
- Company insights – we seek to draw deep insights into businesses from frequent interactions with company management. We also aim to interact with a company’s products or services as a consumer where possible, to sense check the information we are given.
- Understanding industry trends – we liaise with industry experts who are independent from the companies we invest in to gain our own understanding of their markets. We also use our own trusted data sources to enhance this understanding. As a global company, we are able to use information and insights from colleagues around the world to analyse competitors listed elsewhere, where relevant.
- Detailed financial modelling – our company valuations are based on five-year forecasts for earnings and cashflows. We also look at past earnings volatility – the amount earnings differ year-to-year – depending on different market conditions.
How we invest for North American income
- Investing for dividends today and tomorrow: we use the insights described to identify companies with the growth trajectory to offer yields into the future, alongside those paying income today. This means we have a combination of some high yield (paying dividends) companies and some high growth companies.
- Being selective in a land of opportunity: the trust’s portfolio is typically around 45-55 stocks. These represent the best opportunities we believe we can find in the market at any one time. Our rigorous analysis helps us narrow down our potential investments to this list.
- Income from innovation: we aim to take advantage of the US’s innovative business culture. The US market has posted faster dividend growth than any other region over much of the last decade and pays a third of the world’s dividends. We believe that US innovation fuels its income and invest accordingly.
Click here to find out more about The North American Income Trust
Dividend
A variable discretionary payment made by a company to its shareholders.
Earnings per share (EPS)
EPS is the bottom-line measure of a company’s profitability, defined as net income (profit after tax) divided by the number of outstanding shares.
Portfolio
A grouping of financial assets such as equities, bonds, commodities, properties or cash. Also often called a ‘fund’.
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).
Volatility
The rate and extent at which the price of a portfolio, security or index, moves up and down. If the price swings up and down with large movements, it has high volatility. If the price moves more slowly and to a lesser extent, it has lower volatility. The higher the volatility the higher the risk of the investment.
Yield
The level of income on a security over a set period, typically expressed as a percentage rate. For equities, a common measure is the dividend yield, which divides recent dividend payments for each share by the share price. For a bond, this is calculated as the coupon payment divided by the current bond price.
Disclaimer
Janus Henderson Fund Managers UK Limited was appointed as the AIFM of the North American Income Trust with effect from 1 August 2024. Prior to that date, the North American Income Trust’s AIFM was Aberdeen Fund Managers Limited and all information contained in this document should be considered accordingly
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.
Before investing in an investment trust referred to in this article, you should satisfy yourself as to its suitability and the risks involved, you may wish to consult a financial adviser. Please refer to the AIFMD Disclosure document and Annual Report of the AIF before making any final investment decisions. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change.
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.
There is no guarantee that past trends will continue, or forecasts will be realised.
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Important information
Please read the following important information regarding funds related to this article.
- Some of the administrative expenses are taken from capital. This allows more income to be paid but it may also restrict capital growth or even reduce the capital over time.
- Losses could be incurred if a counterparty became unwilling or unable to meet its obligations, or as a result of failure or delay in operational processes or the failure of a third party provider.
- Derivatives may be used with the aim of reducing risk or managing the portfolio more efficiently. However, this introduces other risks, in particular, that a derivative counterparty may not meet its contractual obligations.
- If a Company's portfolio is concentrated towards a particular country or geographical region, the investment carries greater risk (as well as the potential for greater reward) than a portfolio that is diversified across more countries.
- This investment should be held as part of a broader diversified portfolio. Balancing it with investments that have different risk profiles can help reduce the impact of any single investment underperforming.
- The Company may borrow to invest, which could magnify gains or losses.
- As the Company may borrow to invest, changes in interest rates could increase or decrease the cost of any borrowings.
- The Company invests in the shares of other companies. These shares may become hard to value or to sell at a desired time and price, especially in extreme market conditions when asset prices may be falling, increasing the risk of investment losses.
- Your return on investment is directly related to the market price of the Company's shares, which may be higher (trading at a premium) or lower (trading at a discount) than the value of its underlying net asset value assets. This means your returns may differ from the performance of those assets.
- While active management techniques are typically positive for performance, this approach may also result in periods of underperformance relative to the benchmark and comparable passive and index-tracking funds, particularly during unexpected market shifts.
- Shares can gain and lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may rise and fall in line with the underlying equity markets.
- When a portfolio is concentrated (has a significant portion of its assets invested in a limited number of holdings), an adverse event impacting even a small number of holdings could create significant volatility or losses.
- If the companies in which the portfolio is invested persistently reduce their dividend payments, the Company will find it more difficult to maintain or grow its own dividend payments each year.
- The portfolio invests in currencies other than sterling, meaning fluctuations in exchange rates could affect returns.
- The Company maintains a portfolio with a bias towards income-generating companies. This may result in the Company significantly underperforming or outperforming the wider market.