Suits investors prepared to take a relatively higher risk in the volatility of their investment to receive potentially higher rewards. It seeks to provide long-term capital growth from UK companies. Income is of secondary importance.

Henderson Opportunities Trust plc aims for a higher-than-average rate of capital growth over the medium-to-long term, from a portfolio of recovery and 'special opportunities' stocks mainly in the UK.

• The Fund Manager has the freedom to invest across the whole UK market so he is not constrained by sector or size.
• The manager adopts a contrarian investment style seeking investment opportunities that are either unrecognised by the market, from under researched smaller companies or where he is able to move early into a growth situation.
• The Trust invests in opportunities across the spectrum of UK companies with holdings in the FTSE 100, Mid Cap, Smaller Companies, AIM and Fledgling indices.

• Some of the investments in this portfolio are in smaller companies shares. They may be more difficult to buy and sell and their share price may fluctuate more than that of larger companies.
• If a fund is a specialist country-specific or geographic regional fund, the investment carries greater risk than a more internationally diversified portfolio. Full details of risks.

Whilst the April weather produced record downpours and the European sovereign debt crisis appeared to rear its ugly head again, the UK stock market and the British Pound remained relative havens of tranquillity. This has also happened during a month when the UK officially fell back into recession, with gross domestic product (GDP) falling in two consecutive quarters – albeit by the smallest of margins, which may well be revised away over the coming months. The UK stock market has a very large component of overseas earnings and took the disappointment in its stride. Political risks have risen in France where a left-leaning government seemed a real possibility and has now become reality as François Hollande has now become the first Socialist president since 1988. Spain’s sovereign credit rating was again downgraded by Standard & Poor’s, unemployment approached 25%, and its stock market fell 15% in euro terms. The Dutch government collapsed trying to agree budget cuts to reduce the budget deficit, something that caught the markets by surprise.

We have a number of potential new ideas, and with this in mind we began making some room for them by taking profits in a number of stocks – mostly by reducing our holdings modestly, but retaining a core position. To this end, we reduced Ashtead, Hill & Smith, IP Group, Johnson Services, and Interserve. We did partially re-invest the cash raised in Aveva, software tools for the energy-generation market, and Premier Oil, the internationally diversified oil producer. Our only new investment was in Progressive Media, where we are backing the same management team that did such a good job at Datamonitor a few years ago. Our biggest positive contributor over the month was e2v, which produced a reassuring trading update and the stock rose 19%, whereas our poorest contributor was IQE, which fell by 15% following slightly disappointing industry news.

Net asset value rose by 0.5%, including income, whereas the FTSE 100 Index fell by 0.3% and the FTSE AIM All-Share declined 2.1%.

Gearing fell, for the reasons indicated above, to 13.5%.

James Henderson
April 2012