Janus Henderson Absolute Return

Janus Henderson Absolute Return is a long/short equity fund with a UK bias, that aims to deliver a positive absolute return over rolling 12-month periods. The managers look to identify stocks that will either exceed or fall short of analysts' expectations and construct a portfolio of both long (profit when the share price goes up) and short (profit when the share price goes down) positions. There are limits on the overall market exposure, which serves to reduce the volatility of the fund. This fund has a performance fee.

Previously named Janus Henderson UK Absolute Return

Our opinion

While the Janus Henderson Absolute Return fund was launched in 2009, the strategy and the team have a much longer track record running another identical mandate. It comes into its own when stock markets are falling. In a nutshell, we like this fund as, unlike many of its sector peers, it has achieved its stated aim.

Fund manager

Ben Wallace has run the Janus Henderson Absolute Return fund since launch in 2009. The team outsource risk management to an expert third party, which aims to prevent unforeseen risks creeping into the portfolio. Co-manager, Luke Newman, joined the team in March 2010 and has previously managed absolute return funds at Altima Partners LLP.

Ben Wallace

Long/Short fund investing in large-cap UK-listed companies, looking to provide an absolute (more than zero) return every year whilst also using derivatives to attempt to achieve this.

Ben WallaceFund manager

Investment process

This is a long/short equity fund. Two thirds of the portfolio tends to be in shorter-term tactical ideas, where the managers believe an earnings surprise could be imminent. The remainder will be in core holdings, where the managers think there are long-term drivers in place that will either increase or decrease the share price over time. The fund primarily invests in UK equities, though has recently expanded to allow up to 40% of the fund to invest in global equities. Strict limits are placed on the overall market exposure.

ESG

ESG - Limited  

In Ben and Luke’s experience, governance has been the most material input and an integral part of their approach when analysing stocks. They especially look at how management is rewarded, how this is likely to create value for the business and whether this will have an impact on minority shareholders. Environmental and social concerns are becoming of increasing importance though, especially within the opportunity set of those solving sustainability issues. As such, ESG factors are considered for all investments, both on the long and short side, but as a way of helping to understand a business, rather than to drive an investment.

Risk

The fund’s performance is driven by the managers' stock-picking skills, which means the main risks relate to whether or not they buy (or choose to short) the 'right' companies. The number of positions is flexible in order to allow the investment team to take advantage of a range of opportunities and to perform under all market conditions.

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