HEFT.L Regulatory News (HEFT)

Henderson European Focus Trust (HEFT)

09/12/2021

Results analysis from Kepler Trust Intelligence

HEFT has delivered solid NAV returns this year, and shareholder returns have been buoyed by a closing discount…….

This week Henderson European Focus Trust (HEFT) reported its 2021 results for the year ending 30 September 2021. Over this 12-month period, HEFT reported a NAV total return of 22.6% and share price return of 28.8%, compared to the 22.0% return of its benchmark, the FTSE World Europe ex UK Index. This means that as of 30 September, HEFT's NAV return has managed to outperform its benchmark over one, three, five and ten years

Kepler View

In our opinion, HEFT demonstrates the benefits of its manager's 'balanced' approach to equity investing, intentionally eschewing strong stylistic biases within the trust. The team, led by John Bennett and Tom O'Hara, make a point of avoiding a bias toward growth or value, aiming to avoid the risk of substantial underperformance.

While John and Tom do consider macro factors in their approach, they are predominantly bottom-up stock-pickers, and since the start of 2021 the team have been increasingly overweight in companies which can benefit from the V-shaped recovery in consumer activity. This may act as a tailwind to the strategy, so long as the European consumer sector remains strong. The managers believe it will, thanks to the ongoing success of Europe's vaccine rollout and the supportive effects of European fiscal stimulus.

We believe that the team's balanced approach could appeal especially to those who are concerned about near term valuation risks, or the imminent inflation pressures that may unwind the associated 'long duration' trade, which has benefitted expensive, high growth stocks that have much of their potential future growth priced in today. Similarly, in a world where ESG investing has led to increasing sell pressures on a subset of stocks, investors may find the team's considered approach to ESG another attraction…..

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