TIDMHNE
Henderson Eurotrust PLC
13 July 2018
Henderson EuroTrust: New Research
13/07/2018
Highlights:
-- Tim Stevenson has applied the same ex-UK 'quality growth'
stock picking mandate for Henderson EuroTrust since 1995, making
him the longest-tenured manager in the European open- and
closed-end sector combined
-- He invests in companies that are operating in the global
sphere, but are listed and headquartered in Europe, which he
believes will benefit from identified long-term tailwinds
-- The trust has outperformed the benchmark in nine out of the past ten years
-- The trust's dividend currently yields 2.2% (above the
weighted average for the investment trust sector of 1.8%) and it
has delivered 15.8% compound dividend growth over the past 15
years
Read more
Henderson EuroTrust (HNE) is a rare creature in the investment
trust world, having had the same manager for over two decades.
Since 1995 Tim Stevenson, who joined Henderson in 1986, has applied
the same ex-UK 'quality growth' mandate.
This is a pure stock picking trust, with Tim looking to buy and
hold good quality, reliable companies that can increase returns to
the trust. It has an unswerving growth mandate, with Tim investing
in companies that are operating in the global sphere but listed and
headquartered in Europe. He looks to identify companies which will
benefit from long-term tailwinds, and takes a long view in his
ownership of them.
In the current environment, Tim is positioning the portfolio to
benefit from companies that can adapt to change in the face of what
is likely to be a relatively low-growth environment. The main
themes in the portfolio (reflecting Tim's view that GDP growth will
be slow for many years) include demographics, healthcare, savings,
emerging market consumers, innovation, technology and
outsourcing.
In the trust's 2017 report and accounts, the chairman reflected
on the 25th anniversary of the trust and commented that over this
period, the NAV outperformed the benchmark in 20 of the 25 years.
Over the past decade, the trust outperformed in nine of them.
In the future Tim will be aiming to have a higher-conviction
portfolio. Rather than the current 3.3% average position for his
top ten holdings, he will look to own closer to 5% for his best and
highest conviction ideas. This represents a move closer towards the
investment trust peer group, as regards the shape of the
portfolio.
Dividends are a by-product of the sort of companies that Tim
likes to invest in over the long term, and is not a focus per se.
The trust's dividend currently yields 2.2% (above the weighted
average for the investment trust sector of 1.8%) and, having
delivered 15.8% compound dividend growth over the past 15 years,
the progression over the years has been impressive.
In discount terms, Henderson EuroTrust has tracked the average
for the European investment trust peer group. The board last bought
shares back in July 2016, on a discount of c.12%. The current
discount is 5.4%, just wider than the average for the past
year.
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