Meet the Manager

Tim Stevenson joined Henderson Global Investors in 1986 and has been managing European portfolios since 1984. He has been involved in Henderson EuroTrust plc since its launch in 1992 and has been manager since October 1994. He also manages the European portfolios of The Bankers Investment Trust PLC and the Law Debenture Corporation plc. He describes his investment style as stock picking with a growth bias. 

Fund Manager's Commentary - April 2012

The first quarter’s buoyant markets were brought back down to earth in April as sovereign concerns and politics dominated their direction. Equities in Spain and Italy were Europe’s largest underperformers, while Portuguese and Greek equities suffered their second consecutive decline . April also marked the first negative monthly return for the S&P 500, Stoxx 600, DAX, and Nikkei in 2012. Fixed income markets were better, with US Treasuries and German Bunds posting their strongest month for the year. The Thomson Reuters/Jefferies CRB Index finished 0.8% lower, despite US dollar weakness.

While it is still early in the first quarter reporting season, there are a few discernable trends of note. European results are coming in better than expected, while the breadth of surprises is neutral. At the time of writing, market net earnings are 2% ahead of expectations (which rises to 13% excluding financials). That said, the breadth is less encouraging with as many companies missing as beating (the long-run average is a c.15% net beat). Revenues have been strong, but margins weak. The percentage of companies reporting a positive sales surprise is at its highest level since 2005 and sales are coming in 3% better than expected. However, earnings before interest and tax (EBIT) margins are down 20 basis points so far. Earnings revisions have stalled: both financial year (FY)1 and FY2 net earnings revisions have turned slightly negative.

The Trust continued to perform strongly in April. Reporting season has started encouragingly for the Trust with BIC, Sandvik, and Dassault all producing impressive numbers. Amadeus was also amongst the top performers as the company announced two important contracts in the US with Expedia and Southwest Airlines; the success of holdings such as this emphasises the importance of focusing on the underlying business rather than the company of domicile (in this case Spain). Nokia proved the biggest single disappointment in the portfolio as the business continued to deteriorate and the shares sold off aggressively; we exited this stock as well as our position in Banco Santander during the month.