Janus Henderson European Focus

Janus Henderson European Focus is a more concentrated version of the Elite Rated Janus Henderson European Selected Opportunities fund, with 30-40 holdings, which are weighted by conviction. The manager uses a combination of sector analysis and stock selection in his process, which produces a ‘best ideas’ portfolio with the flexibility to invest across all industries in the European equity market.

Our opinion

John's pragmatic approach means he considers the overall macroeconomic environment and sector trends, as well as the criteria of individual companies - a style that has led to strong performance since his tenure began. We like the fact that the team is structured in such a way that it can focus on the areas where it can add most value, and invest early enough in a stock - and with enough conviction - to maximise the investment opportunity.

Fund manager

John Bennett became part of Henderson (now Janus Henderson) in 2011 after previous employer Gartmore was acquired by the company. Prior to that, he was a fund manager at GAM for 17 years. He also manages Elite Rated Janus Henderson European Selected Opportunities. John is director of European equities at Janus Henderson and has been a Member of the Chartered Institute of Bankers in Scotland since 1987. John is one of the most experienced European fund managers in the industry with over 30 years’ experience.

john bennett henderson

Our process is governed by early identification of industry or sector themes that will still be around a decade from now. This allows us to ignore the macro-driven fear and optimism that fills newspapers, and focus on what matters – real or ‘absolute’ value.

John BennettFund manager

Investment process

John and his team seek to add value by identifying and selecting sector themes and combining them with fundamental bottom-up stock analysis. They begin by considering market and industry dynamics on a global basis. The team conducts many company meetings which gives it an overall insight into the marketplace. The insights it gains leads it to different ‘sector themes’, which allow it to narrow its investment universe down to the areas with the greatest potential. Research is concentrated on under-researched stocks where the team can add the most value.

The team believes in the power of mean reversion and Janus Henderson European Focus will typically have a bias towards contrarian investing as a result. It is important for the team to identify a catalyst and ‘investing in change’ is a crucial part of the process. The portfolio has more exposure to medium-sized companies than Elite Rated Janus Henderson European Selected Opportunities fund.

The fund previously held between 30-50 stocks; however, John and the team have increased the level of concentration in both this and the Elite Rated Janus Henderson European Select Opportunities fund to improve the active characteristics within the portfolio.

ESG

ESG - Limited  

John’s approach to ESG is informal and on a case-by-case basis. He looks at the rate of change of companies, rather than how they look at any one time and wants to ensure that he captures the solutions to environmental and social issues, rather than excluding those firms that don’t meet the accepted definition of responsible. As such, the portfolio may include firms in challenged industries, but that are leaders in reducing their carbon footprints and other environmental impacts. John sums this up as “ESG 2.0”, where he believes the industry will move on from simply excluding laggards, into allocating towards those improving their issues. The fund does report its carbon footprint, the climate goals of its holdings and the overall ESG risk based on external data. Internally, there is regular engagement from the team at Janus Henderson on all identified E, S & G issues, with the boards of the portfolio of companies in collaboration with the wider equities team. This includes voting policies which are made in close consultation with the fund manager.

Risk

Janus Henderson European Focus is carefully constructed to be well diversified. It is a concentrated fund which is not afraid to take stock and sector positions which are significantly different to the index. Risk is controlled by limiting holdings in an individual stock to 10%, although in the past very few have gone past the 5% barrier. However, this is likely to be more common in the future thanks to the increased concentration in holdings, a move which is also likely to see risk increase slightly. Investors should also be aware of the currency risk.

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