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Trust update: The Henderson Smaller Companies Investment Trust
Neil Hermon, Fund Manager of The Henderson Smaller Companies Investment Trust, provided an update on the trust in this latest webinar by ShareSoc.
26 Nov 2024
60 minute watch
60 minute watch
Key takeaways:
- Experienced team of small cap investors
- Long history of outperformance
- Bottom up, consistent approach to investing
- Long-term time horizon and a portfolio with low turnover
- Portfolio of high quality, mid and small cap stocks
| Discrete year performance (%) | Share price (total return) | NAV (total return) |
| 30/9/2023 to 30/9/2024 | 27.0 | 24.7 |
| 30/9/2022 to 30/9/2023 | 4.2 | 2.0 |
| 30/9/2021 to 30/9/2022 | -40.5 | -37.6 |
| 30/9/2020 to 30/9/2021 | 66.1 | 56.3 |
| 30/9/2019 to 30/9/2020 | -10.6 | -4.0 |
All performance, cumulative growth and annual growth data is sourced from Morningstar.
Source: at 30/09/24. © 2024 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance does not predict future returns.
Glossary
Active investing – An investment management approach where a fund manager actively aims to outperform or beat a specific index or benchmark through research, analysis and the investment choices they make. The opposite of Passive Investing.
Balance sheet – A financial statement that summarises a company’s assets, liabilities and shareholders’ equity at a particular point in time. Each segment gives investors an idea as to what the company owns and owes, as well as the amount invested by shareholders. It is called a balance sheet because of the accounting equation: assets = liabilities + shareholders’ equity.
Cash Flow – Cash flow is the net amount of cash and cash equivalents transferred into and out of a company. Positive cash flow indicates that a company’s liquid assets are increasing, enabling it to settle debts, reinvest in its business, return money to shareholders, and pay expenses.
Compound Annual Growth Rate (CAGR) – Measures an investment’s annual growth rate over time, including the effect of compounding (where any income is reinvested to generate additional returns). CAGR is typically used to measure and compare the past performance of investments or to project their expected future returns.
Cyclical stocks – Companies that sell discretionary consumer items (such as cars), or industries highly sensitive to changes in the economy (eg. mining).
Deutsche Numis Smaller Companies Index (DNSCI) – The Deutsche Numis Smaller Companies ex Investment Trusts Index is a measure of the combined performance of smaller companies (the bottom 10%) listed on the London Stock Exchange excluding investment companies. It provides a useful comparison against which the Fund’s performance can be assessed over time.
Discount/premium (investment trusts) – The amount by which the price per share of an investment company is either lower (at a discount) or higher (at a premium) than the net asset value per share (cum income), expressed as a percentage of the net asset value per share.
ESG – Environmental, Social and Governance (ESG), also known as sustainable investing, considers ethical factors beyond traditional financial analysis.
Equity – A security representing ownership, typically listed on a stock exchange. ‘Equities’ as an asset class means investments in shares, as opposed to, for instance, bonds. To have ‘equity’ in a company means to hold shares in that company and therefore have part ownership.
Forward price-to-earnings (P/E) ratio – A version of the price-to-earnings (P/E) ratio, used to value a company’s shares, that utilises forecasted earnings in its calculation.
Gearing – Gearing is a measure of a company’s debt relative to its equity, showing how far its operations are funded by lenders versus shareholders. Investment trusts: The effect of borrowing money for investment purposes (financial gearing). The amount a company can “gear” is the amount it can borrow in order to invest.
Gilts – UK government bonds sold by the Bank of England, used to finance public spending.
Initial Public Offering (IPO) – The process of issuing shares in a private company to the public for the first time.
Market capitalisation (market cap) – The total market value of a company’s issued shares. It is calculated by multiplying the number of shares in issue by the current price of the shares. The figure is used to determine a company’s size and is often abbreviated to ‘market cap’. Investment trusts: Market capitalisation is the share price multiplied by the number of shares in issue, excluding treasury shares, at month end. Shares typically priced mid-market at month-end closing.
Net asset value (NAV) – The total value of a fund’s (or company’s) assets less its liabilities.
Share buybacks – Where a company buys back their own shares from the market, thereby reducing the number of shares in circulation, with a consequent increase in the value of each remaining share. It increases the stake that existing shareholders have in the company, including the amount due from any future dividend payments. It typically signals the company’s optimism about the future and a possible undervaluation of the company’s equity.
Share price total return (investment trusts) – The theoretical total return to the investor assuming that all dividends received were reinvested in the shares of the company at the time the shares were quoted ex-dividend. Transaction costs are not taken into account.
Small caps – Companies with a valuation (market capitalisation) within a certain scale, eg. $300 million to $2 billion in the US, although these measures are generally an estimate. Small cap stocks tend to offer the potential for faster growth than their larger peers, but with greater volatility.
Underweight – To hold a lower weighting of an individual security, asset class, sector, or geographical region than a portfolio’s benchmark.
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. For investment trusts: Calculated by dividing the current financial year’s dividends per share (this will include prospective dividends) by the current price per share, then multiplying by 100 to arrive at a percentage figure.
Disclaimer:
There is no guarantee that past trends will continue, or forecasts will be realized. 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.
Not for onward distribution. 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. This is a marketing communication. Please refer to the AIFMD Disclosure document and Annual Report of the AIF before making any final investment decisions. Past performance does not predict future returns. Not for distribution in European Union member countries. 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. We may record telephone calls for our mutual protection, to improve customer service and for regulatory record keeping purposes.
Issued in the UK by Janus Henderson Investors. Janus Henderson Investors is the name under which investment products and services are provided by Janus Henderson Investors International Limited (reg no. 3594615), Janus Henderson Investors UK Limited (reg. no. 906355), Janus Henderson Fund Management UK Limited (reg. no. 2678531), (each registered in England and Wales at 201 Bishopsgate, London EC2M 3AE and regulated by the Financial Conduct Authority), Tabula Investment Management Limited (reg. no. 11286661 at 10 Norwich Street, London, United Kingdom, EC4A 1BD and regulated by the Financial Conduct Authority) and Janus Henderson Investors Europe S.A. (reg no. B22848 at 78, Avenue de la Liberté, L-1930 Luxembourg, Luxembourg and regulated by the Commission de Surveillance du Secteur Financier).
Janus Henderson is a trademark of Janus Henderson Group plc or one of its subsidiaries. © Janus Henderson Group plc
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26 Nov 2024
60 minute watch
60 minute watch
Key takeaways:
- Experienced team of small cap investors
- Long history of outperformance
- Bottom up, consistent approach to investing
- Long-term time horizon and a portfolio with low turnover
- Portfolio of high quality, mid and small cap stocks