Henderson Opportunities Trust

LN: HOT

Market Cap£83m

Last Close 1055p

Henderson Opportunities Trust aims to achieve capital growth in excess of the broad UK stock market from a portfolio of UK investments. Stock selection is not constrained by the benchmark and there are no limits by sector or market capitalisation; therefore, the portfolio will differ materially from the index.

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Investment summary

Henderson Opportunities Trust (HOT) is unusual in that its unconstrained mandate means it can buy into very small companies and hold them no matter how large they get. Managers James Henderson and Laura Foll explain that the investment trust structure enables them to own micro-caps (sub-£50m), which can be very illiquid and therefore unsuitable for an open-ended fund. For example, AIM-listed Serica Energy (the top holding at c 3.6% of the portfolio) now has a market cap of c £900m but it was only c £48m when HOT first invested in late 2013. Meanwhile, the trust’s all-cap nature means that, unlike a dedicated smaller companies fund, it can also own mega-caps such as Shell (£172bn) and HSBC (£101bn). HOT has underperformed the broad UK stock market in recent months after a very strong FY21, but has a compelling longer-term track record, ranking first in the AIC UK All Companies sector over three, five and 10 years.