Fund Performance review
The fund outperformed its benchmark, the MSCI All Country World Index, returning 9.8% versus 5.8% over the first quarter of 2017.
It benefited from having no exposure to the energy sector, and some attractive gains across a number of holdings in the information technology and consumer discretionary sectors.
At the stock level, the entertainment software developer Activision Blizzard was among the strongest performers over the period and recovered from an oversold position at the end of last year. The company reported strong fourth quarter earnings, but more importantly there is increasing evidence of rising user engagement across a broad base of games, together with greater monetisation via its digital distribution platform. Thus, we continue to believe that the business is well placed for the future.
Other notable contributors included Cognex and MercadoLibre. Both are benefiting from strong secular trends, the adoption of machine vision technology and the growth of ecommerce. Our holding in HDFC Ltd, the largest non-state owned provider of mortgages in India, also enjoyed a strong period of performance and we remain confident in its management’s ability to grow the business profitably over the long term.
The largest detractor from performance was Spirit Airlines, where our investment case was not playing out and so we sold the stock. Increased competition from legacy airlines, which now have stronger balance sheets following a period of industry consolidation, and which have benefited to some extent from lower jet fuel prices, have negated to a degree Spirit’s lower cost structure. Therefore, our conviction in Spirit succeeding in its expansion plans was reduced. We also decided to exit our position in F5 Networks, a provider of networking technology, after a strong period of performance and, as a consequence, limited valuation upside.
|Discrete year performance
||Henderson Global Growth Fund (%)
||MSCI AC World Index (%)
|1 year to 31/03/2017
|1 year to 31/03/2016
|1 year to 31/03/2015
|1 year to 31/03/2014
|1 year to 31/03/2013
: Morningstar, at 31 March 2017, nav-nav, net income reinvested, net of fees, Class A Acc shares, in Sterling. Past performance is not a guide to future performance. Prices can go up and down and you may not get back the amount originally invested. NAV = net asset value.
Fund activity review
During the quarter we initiated a holding in Berkshire Hathaway, the investment vehicle of Warren Buffet and Charlie Munger, which owns a diverse range of businesses and investments. Buffet and Munger have an unparalleled record of capital allocation and Berkshire’s businesses appear well placed for the long term. We also established holdings in Uni-President Enterprises, a Taiwan-listed business with operations in food manufacturing, beverages and convenience stores, and in Estee Lauder, the leading player in the global prestige beauty market. Both of these businesses have the characteristics we look for when searching for new ideas and we expect them to perform well over the long term.
Fund manager's outlook
Many investors will be drawn into attempts to predict the short-term course of the market. We do not try to predict political events, nor do we attempt to second guess the market’s reaction when the unexpected unfolds. While we don’t wish to be naive about the implications, we believe there are much more predictable trends to be studied in the quieter domain of the long-term investor - for example, the penetration rate of e-commerce or the adoption of active safety systems in vehicles. We remain entirely focused on uncovering undervalued securities that are exposed to strong secular tailwinds of growth. By sticking to this strategy, we aim to continue generating significant absolute and relative returns over the longer term.
Please read all scheme documents before investing. Before entering into an investment agreement in respect of an investment referred to in this document, you should consult your own professional and/or investment adviser.
Past performance is not a guide to future performance. 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.
If you invest through a third party provider you are advised to consult them directly as charges, performance and terms and conditions may differ materially.
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.
Any investment application will be made solely on the basis of the information contained in the Prospectus (including all relevant covering documents), which will contain investment restrictions. This document is intended as a summary only and potential investors must read the prospectus, and where relevant, the key investor information document before investing.
Issued in the UK by Henderson Global Investors. Henderson Global Investors is the name under which Henderson Global Investors Limited (reg. no. 906355), Henderson Fund Management Limited (reg. no. 2607112), Henderson Investment Funds Limited (reg. no. 2678531), Henderson Investment Management Limited (reg. no. 1795354), AlphaGen Capital Limited (reg. no. 962757), Henderson Equity Partners Limited (reg. no.2606646), Gartmore Investment Limited (reg. no. 1508030), (each incorporated and registered in England and Wales with registered office at 201 Bishopsgate, London EC2M 3AE) are authorised and regulated by the Financial Conduct Authority to provide investment products and services. Telephone calls may be recorded and monitored. Ref: 34U.
Important Information: Willis Owen do not give investment advice so you will need to decide if an investment is suitable for you. If you are unsure whether to invest, you should contact a financial adviser.