Global Leaders Fund (HFPAX, HFPCX, HFPIX)

The Fund seeks to achieve long-term capital appreciation primarily through investment in equity securities of US and non-US companies. With two experienced co-portfolio managers, the Fund utilizes a fundamental approach with a growth-at-a-reasonable-price philosophy. The Fund is managed by Brian O-Neill and Yu-Jen Shih.

• Quarterly Factsheet

 

Why invest in this fund?

• A fundamental approach, leveraging Henderson's extensive investment capabilities
• A growth-at-a-reasonable-price philosophy
• Bottom-up stock selection, with country and sector allocation decisions driven by the stock selection process
• Rigorous investment process involving a multi-factor 'growth' and 'valuation' based screening practice in addition to fundamental research
• Accomplished investment management team with a combined 55 years of global equity experience

   

Fund facts (as of 3/31/12)

Inception date:	11/30/06
Minimum initial investment:	$500
Benchmark:	MSCI World Index
Median market cap ($billions):	20.4
Total number of holdings:	40
Forward 12-month P/E ratio:	14.8
P/B ratio:	2.8
Beta:	1.0
% of holdings in top 10:	36.6
Class A expense ratio1:	1.40
Morningstar rating (as of 4/30/12)2

¹This ratio is not a guaranteed number and may fluctuate. The class A expense ratio is presented as a percentage of average net assets. The expense ratio is unaudited and is based on annualized fiscal year-to-date results from 8/01/11 to 3/31/12. The ratio may differ from that presented in the Fund’s prospectus that is based on the Fund’s then most recent previous fiscal year.

² Morningstar category: World Stock, Number of funds in category: 707. The overall Morningstar Rating for the Fund is derived from a weighted average of the risk-adjusted performance figure associated with its 3- and 5- year Morningstar Rating metrics.

 

Portfolio management

Brian O'Neill
Senior Investment Manager

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Yu-Jen Shih 
Portfolio Manager, International Equities

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Top ten holdings
(as of 4/30/12) %

Apple (US)	4.8
American Tower (US)	3.9
QUALCOMM (US)	3.8
UPS (US)	3.6
Kansas City Southern (US)	3.4
Dollar General (US)	3.4
Praxair (US)	3.3
Intuit (US)	3.2
VF Corp. (US)	3.0
Standard Chartered (UK)	3.0

A company's country classification is based on multiple factors including legal domicile and underlying exposure of its business.

• Full holdings list

Performance

Relative performance as of 3/31/12

Inception date 11/30/06.

Lipper rankings are based on total return and do not reflect a sales charge. Rankings are for Class A shares only, other share classes may vary.

Expense ratios are not guaranteed numbers and may fluctuate. Gross and net expense ratios are presented as a percentage of average net assets. The gross expense ratio is stated in the current prospectus and is based on the Fund's then most recent fiscal year. The net expense ratio is unaudited and is based on annualized fiscal year-to-date results from 8/01/11 to 3/31/12. The ratio may differ from that presented in the Fund's prospectus.

For periods prior to 5/31/11, Class I share rates of return are based on Class A shares at NAV.

Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. Performance results with sales charges reflect the deduction of the maximum front end sales charge and/or the deduction of the applicable contingent deferred sales charge (CDSC). Class A shares are subject to a maximum front end sales charge of 5.75%. Class C shares may be subject to a CDSC of up to 1% on certain redemptions made within 12 months of purchase. Performance presented at NAV which does not include these sales charges would be lower if these charges were reflected. The Fund’s annual operating expenses will likely vary from year to year. It is important for you to understand that a decline in the Fund’s average net assets during the current fiscal year due to recent market volatility or other factors could cause the Fund’s expense ratios for the Fund’s current fiscal year to be higher than the expense information presented. Returns greater than one year are annualized. Index returns provided by Lipper, Inc. Net Asset Value (NAV) is the value of one share of the Fund excluding any sales charge.

Returns included the reinvestment of dividends and capital gains. Performance results reflect expense subsidies and waivers in effect during the periods shown. Absent these waivers, results would have been less favorable for certain periods.

Forward 12-month P/E ratio is calculated using the closing price of portfolio holdings divided by the sum of the 12-month forward earnings per share. P/B ratio is calculated using the closing price of portfolio holdings divided by the most recent fiscal year end book value. Both calculations take into account the respective weightings of portfolio holdings. Beta is a quantitative measure of the volatility of a given stock, mutual fund, or portfolio, relative to the overall market. The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. It is not possible to invest directly in any index.

Fund overview

This Fund seeks to achieve long-term capital appreciation primarily through investment in equity securities of US and non-US companies. The Fund employs a process that combines a bottom-up approach to individual security selection with a strategic asset allocation process. Security selection will be based upon an analysis of a company's valuations relative to earnings forecasts or other valuation criteria, earnings growth prospects of a company, the quality of a company's management and the unique competitive advantages of a company. The Fund is managed by Brian O'Neill and Yu-Jen Shih.

Quarterly update

2012 began with one of the strongest starts to a calendar year as risk assets found favor after a volatile end to 2011. Growth sensitive sectors such as consumer discretionary, materials, industrials and information technology delivered some of the strongest returns as demand proved robust and earnings resilient. Financials also participated in the rally, buoyed by the increased liquidity from the European Central Bank and positive earnings and banking stress test results in the US. By region, continental Europe and Asia ex-Japan delivered the strongest returns outperforming the UK and Japan. Emerging markets generally outperformed developed markets despite the Chinese market being a laggard.

Fund performance

The Fund outperformed the MSCI World Index over the quarter. By sector, stock selection in IT, Consumer Discretionary and Industials added value; holdings in North America, Europe and Asia-Pacific ex-Japan were also positive. This more than offset weakness in financial holdings. Within the IT sector, Apple soared through $600 per share for the first time on the back of strong demand for its next generation iPad and its intention to return $45bn to shareholders. Additionally, the position in US wireless communications equipment manufacturer Qualcomm was a strong performer; the company’s next generation of technologies should significantly improve data capacity. Within the consumer discretionary sector, strong results from Hong Kong listed luxury retailer Prada and a positive update from speciality mattress manufacturer Tempur-Pedic underpinned strong share price performance. On the downside, the disastrous capsize of the ocean liner Costa Concordia off the coast of Italy had a negative impact on the Fund’s holding in Carnival Cruises. Additionally, holdings in the more defensive Shire Pharmaceutical and Unilever detracted from returns. 

Investment activity

During the quarter we sold out of the long-held position in Sands China as we see slowing growth in casino and resort earnings in Macau and we believe the shares to be fully valued. We also sold Carnival on concerns about demand growth in the wake of the sinking of the Costa Concordia cruise ship. We added a position in Japanese multi-line insurer Tokyo Marine Holdings. The company is well capitalised, has demonstrated strong risk management, will benefit from premium growth and could restart their share buyback. We also added VF Group to the portfolio.

Outlook

The equity market has benefited from a reduction in tail risk around the Eurozone debt crisis; however to make further progress we need to see global macroeconomic data continue to support the economic expansion and for companies to continue to report better than expected earnings; this may not be a smooth journey as China shifts from an investment led to consumption led economy. At the company level; earnings have generally been better than quite downbeat expectations, however managements have maintained their cautious stance on forward looking statements. In this environment we continue to invest in companies which we believe can grow their earnings in the current market conditions, and that these companies’ stock prices will attract a premium.

Prospectus/SAI

Global Leaders Fund