Fund Manager commentary - Henderson EuroTrust



​After a difficult October, November proved to be another challenging month for growth/quality focused strategies, but, helped by a few stock-specific winners, we managed to finish almost in line with the index performance. 

There are two stocks that performed particularly well during November that merit specific attention. First, Novo Nordisk has bounced back nicely following a weak October. Recently, some investors had been concerned that positive Phase 2 data from Eli Lilly on their GLP-1/GIP combination treatment significantly threatened Novo’s GLP-1 product Ozempic. This concern is now easing as investors realise that the Lilly treatment has potentially significant side effects, is a number of years away from reaching market and that its success may actually help to grow the overall size of the GLP-1 market. 

Second, Vestas has rallied very strongly in recent months.  During the earlier part of 2018, there was significant concern that turbine prices were coming under pressure, led by very competitive auctions. This threat is now perceived to be easing and the shares have moved to reflect this. We continue to view the company as being exposed to decent structural growth and to be improving in quality as the revenue base increasingly shifts to after-market activities.

We had a quiet month in terms of trading activity. We have sold our position in the Dutch bank Van Lanschot and we have trimmed positions in Amundi and in Deutsche Post. With Amundi, we are reacting to a weaker environment for slows that we fear may persist well into 2019 and with Deutsche Post we are responding to a slower volume growth environment in their Express business; we retain decent sized positions in both of these businesses.

After a difficult couple of months, we are starting to see opportunities arising in some of our key long term holdings. We remain in a net cash position overall and will look to use the current sell off in growth/quality companies as an opportunity to increase our overall exposure to specific name.

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.

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Henderson EuroTrust plc

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.

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. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change.

Nothing in this document is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment.

Issued in the UK by Janus Henderson Investors. Janus Henderson Investors is the name under which investment products and services are provided by Janus Capital International Limited (reg no. 3594615), Henderson Global Investors Limited (reg. no. 906355), Henderson Investment Funds Limited (reg. no. 2678531), AlphaGen Capital Limited (reg. no. 962757), Henderson Equity Partners Limited (reg. no.2606646), (each registered in England and Wales at 201 Bishopsgate, London EC2M 3AE and regulated by the Financial Conduct Authority) and Henderson Management S.A. (reg no. B22848 at 2 Rue de Bitbourg, L-1273, Luxembourg and regulated by the Commission de Surveillance du Secteur Financier). We may record telephone calls for our mutual protection, to improve customer service and for regulatory record keeping purposes.

Specific risks

  • Active management techniques that have worked well in normal market conditions could prove ineffective or detrimental at other times.
  • 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.
  • 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.
  • The trust could lose money if a counterparty with which it trades becomes unwilling or unable to meet its obligations to the trust.
  • 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 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.
  • 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.
  • 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.
  • 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.

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