The Henderson Global Growth Fund outperformed its benchmark, the MSCI All Country World Index, returning 12.3 versus 8.5% in sterling terms over the three month period.
From a sector perspective, the consumer sectors (both discretionary and staples) meaningfully drove fund outperformance while our aversion of the more cyclical financials and materials sectors hurt relative performance.
Looking at individual holdings, we have been encouraged by the operational performance of many of our emerging market-exposed companies in recent months. While Europe fixates on the precarious state of its banking system, the UK mulls over the implications of ‘Brexit’ and the US on its presidential election, the rest of the world continues to operate. South African retailer Shoprite was a materially positive contributor and grew to become the largest position in the fund last quarter. The owner of the Shoprite and Checkers chains of supermarkets is expanding in a measured fashion into sub-Saharan Africa, where its low price model is generating both impressive real growth and trading margins. While we trimmed the position late in the quarter after the strong run in the share price, it remains in our top ten holdings.
Elsewhere, US-based Cognex, one of the global leaders in machine vision technology, was also a material contributor to positive performance. Machine Vision systems are used to guide production equipment, improve speed and quality of manufacturing, and inspect quality of products coming down a line. Cognex’s systems combine hardware and software elements and are gaining wider traction as manufacturing and logistics companies utilise increased automation within their factories and sorting centres. We continue to like the company’s positioning in the industry, with a large intellectual property portfolio providing a sustainable competitive advantage and a very strong balance sheet, protecting the company should it encounter a leaner spell of orders.
* Source: Morningstar, at 30 September 2016, 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
|Discrete year performance
||Henderson Global Growth Fund (%)
||MSCI World Index (%)
|1 year to 30/09/16
|1 year to 30/09/15
|1 year to 30/09/14
|1 year to 30/09/13
|1 year to 30/09/12
Portfolio activity was relatively light over the quarter with no new additions or exits. We used share price weakness to add to long standing positions in CVS Health, Rightmove and Auto Trader.
Fund positioning and manager's outlook
Our strategy is to avoid making major macroeconomic calls, and to instead focus bottom-up on finding companies with underappreciated growth and high barriers to entry at attractive valuations. Through purchasing undervalued securities that are exposed to strong secular tailwinds of growth, we aim to generate significant absolute and relative returns over the longer term.
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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.
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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
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