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.
Equity markets have been relatively weak and volatile so far in 2022 as a result of slowing economic growth, rising interest rates, soaring inflation and the ongoing war in Ukraine. Henderson Opportunities Trust (HOT), which has a bias to midsized and smaller companies including those listed on the Alternative Investment Market (AIM), has had a tougher time of it in 2022 after a very strong 2021. The investment process is, as with all James Henderson and Laura Foll mandates, mildly contrarian, incrementally taking advantage of valuation anomalies and market volatility to build a good-quality all-cap portfolio trading on attractive valuations. Through 2022 the managers have been gradually reducing areas that have been relatively strong, such as large caps and energy in particular, to fund purchases in more cyclical parts of the market that have been subject to aggressive selling. There is no exact science to being a contrarian fund manager, but the experience of the team over many cycles can give investors confidence that the portfolio can revert to form and outperform over the medium to longer term.