HEFT.L Regulatory News (HEFT)

Henderson European Focus Trust (HEFT)

29/05/2024

Results analysis from Kepler Trust Intelligence

Over the six months to 31/03/2024, Henderson European Focus Trust (HEFT) produced an NAV total return of 17.9% and a share price total return of 17.0%, outperforming the benchmark. Longer-term, over five years to 31/03/2024, the trust's NAV and share price returns of c. 85% and c. 82% compared to the benchmark's c. 57% return and the Morningstar Europe peer group's NAV total return of c. 63%.

The largest positive contributions to performance were Nestle (not owned), aircraft engine maker Safran, BE Semiconductor, Roche (not owned), long-term holding Holcim, a construction materials manufacturer, and Airbus, a customer of Safran. Negative contributions came from pulp and paper manufacturer UPM Kymmene, oil company Aker BP, healthcare company Grifols (sold) and food retailer Ahold Delhaize (sold). The managers note that many of the detractors exhibit more cyclical characteristics, in contrast to the 'global winners' that contributed most to performance.

During the period HEFT announced a proposed combination with Henderson Eurotrust (HNE), also managed by Janus Henderson, with HEFT's manager Tom O'Hara to be joined by HNE's manager Jamie Ross as co-manager. Under the proposals HEFT will be the continuing trust, renamed as Henderson European Trust, and the transaction is, subject to shareholder approval, expected to be completed in July 2024. The trust will estimated net assets of c. £680m, making it one of the largest in its peer group. It is notable that the two trusts in the peer group with assets over £700m both trade at much narrower single-digit discounts than the rest of the peer group. One can't of course expect any re-rating to come automatically, but the 'size matters' argument of professional investors only gets louder every year, and this transaction removes a barrier that could in our view prove decisive for HEFT's discount, especially if this is combined with continued positive progress for European equities.

CLICK HERE TO READ THE FULL REPORT  Visit Kepler Trust Intelligence for more high quality independent investment trust research.

Important information

This report has been issued by Kepler Partners LLP. The analyst who has prepared this report is aware that Kepler Partners LLP has a relationship with the company covered in this report and/or a conflict of interest which may impair the objectivity of the research.

Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. It is strongly recommended that if you are a private investor independent financial advice should be taken before making any investment or financial decision.

Kepler Partners is not authorised to make recommendations to retail clients. This report has been issued by Kepler Partners LLP, is based on factual information only, is solely for information purposes only and any views contained in it must not be construed as investment or tax advice or a recommendation to buy, sell or take any action in relation to any investment.

The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country. In particular, this website is exclusively for non-US Persons. Persons who access this information are required to inform themselves and to comply with any such restrictions.

The information contained in this website is not intended to constitute, and should not be construed as, investment advice. No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the information and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information, for any errors, omissions or misstatements, negligent or otherwise. Any views and opinions, whilst given in good faith, are subject to change without notice.

This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.

Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm's internal rules. A copy of the firm's Conflict of Interest policy is available on request.

PLEASE SEE ALSO OUR TERMS AND CONDITIONS

Kepler Partners LLP is authorised and regulated by the Financial Conduct Authority (FRN 480590), registered in England and Wales at 70 Conduit Street, London W1S 2GF with registered number OC334771.