Results analysis from Kepler Trust Intelligence

Henderson European Focus Trust PLC

13 December 2023

 

Henderson European Focus Trust (HEFT)

13/12/2023

Results analysis from Kepler Trust Intelligence

Henderson European Focus's (HEFT's) NAV and share price total return for the year to 30/09/2023 were 24.1% and 27.7% respectively, outperforming the benchmark, the FTSE World Europe ex UK, which produced a total return of 20.5%. The equivalent NAV total return figure for the AIC Europe peer group was 20.0%. The trust has also outperformed its benchmark over three, five, seven and ten years. Total dividends for the year were 4.35 pence per share (2022: 4.35p). At the closing share price on 12/12/2023 of 167p this represents a yield of 2.6%.

Co-manager Tom O'Hara very recently appeared in a webinar hosted by Kepler, which can be viewed here, where among other things he made the observation that European equities are, on a forward P/E basis, cheaper than they have ever been compared to US equities. Industry fund flow data shows that during 2023, investors haven't been selling European equity funds in the huge volumes they did in 2022, but neither have they re-embraced them, with a steady drip of selling. So, despite good performance since the lows of September 2022, these low valuations may yet help turn the tide on investor sentiment, which could be very constructive for European equities generally.

HEFT is currently trading at a 13% discount. With European equities at exceptionally low valuations, and notwithstanding the strong performance of the last year, we think this could be a very good entry point for long-term investors.

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