September, 2023
The portfolio’s overweight exposure to the energy sector was positive for relative returns during the period. The sector benefited from a rise in crude prices and European natural gas prices. Oil prices increased as extended production cuts by some major producers and strong U.S. demand offset worries about higher-for-longer interest rates and economic weakness in China. Natural gas prices rose in August on concerns about strike actions at three liquefied natural gas (LNG) plants in Australia that together are responsible for 10% of global LNG supply.
Strong stock selection in the materials sector also was beneficial. Reparation of the Chinese property market and higher infrastructure spend from local authorities once their debt positions are cleaner should support demand for mining commodities, and the portfolio’s mining positions outperformed on this basis. Chemicals stocks in the portfolio also performed well after announcing weak sets of financial results, suggesting expectations have been rebased to appropriate levels.
The portfolio’s underweight exposure to the communication services sector detracted from relative performance. The sector outperformed the broader market, driven by Internet media and services companies that reported good financial results and are perceived to benefit from progress in artificial intelligence. Because these companies are too low yielding, they are not in the portfolio’s investible universe, and this hurt portfolio performance during the quarter.
Another notable detractor was the portfolio’s overweight exposure to the consumer staples sector. The sector underperformed on concerns about risks to pricing as volumes continued to be more subdued across the industry. The largest detractor from a stock perspective was Brazilian beer company Ambev, which released a disappointing set of results due to weak Brazilian beer volumes. Ambev gained market share during the period, however, and we see scope for outperformance as the Brazilian market improves and the costs of goods sold decline.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Commentary_GlobalEquityIncomeFund_Multi-Share_3Q23_exp10-15-23_1.pdfJune, 2023
The largest detractor from relative returns was an underweight position in the information technology sector, which significantly outperformed the broader market. Excitement about the rapid growth in AI was the main driver for the sector’s strong returns during the quarter.
An overweight position in the materials sector also detracted from relative returns. The sector underperformed the broader market and holdings in the mining industry were notably weak due to falling commodity prices and worries over economic growth.
The largest positive driver of relative returns was the healthcare sector, which underperformed the broader market during the quarter. However, holdings in the pharmaceutical industry outperformed the sector. We believe pharmaceutical companies trade at attractive valuations and recent drug pipeline announcements are a testament to the R&D capabilities in the sector, which we believe will ultimately drive long term returns for the sector.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Commentary_GlobalEquityIncomeFund_Multi-Share_2Q23_exp07-15-23_2.pdfMarch, 2023
The Fund’s underweight position in the information technology sector was the largest detractor from relative performance during the quarter. The sector outperformed in the context of peaking interest rate expectations driving better performance in economically sensitive areas of information technology and in high-growth companies that had devalued in 2022.
Our overweight exposure to the energy sector and stock selection and overweight allocation in the materials sector also were detrimental on a relative basis. These sectors underperformed due to concerns about the impact of further economic tightening.
The largest positive contributor to relative performance was the Fund’s stock selection in the financials sector, which lagged the broader market due to concerns about a global banking crisis. We had reduced our bank exposure earlier in the quarter to take profits after a period of strong performance. This was beneficial to performance, most notably in March when banking stocks underperformed the broader sector. Stock selection in the utilities and healthcare sectors also was additive to relative returns.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/JanusHendersonGlobalEquityIncomeFund_1-1.pdfDecember, 2022
The Fund underperformed its secondary benchmark, the 85% MSCI ACWI Ex U.S. High Yield Dividend / 15% MSCI USA High Dividend Yield Index.
The largest contributor to relative performance during the period was the Fund’s underweight position in the information technology sector. In particular, our overweight exposure to Asian technology companies was a key driver of outperformance. We had added to Asian semiconductor stocks earlier in the year as valuations had fallen relative to non-Asian peers, which we believed to be unwarranted. These holdings provided strong dividend yields and traded at attractive multiples post recent outperformance.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/JanusHendersonGlobalEquityIncomeFund_1.pdfOctober, 2022
The Fund underperformed both its primary benchmark, the MSCI World IndexSM, and its secondary benchmark, the 85% MSCI ACWI Ex U.S. High Yield Dividend / 15% MSCI USA High Dividend Yield Index, for the quarter ended September 30, 2022.
The Fund’s stock selection in healthcare was the largest detractor from relative returns over the period. Holdings in Sanofi and GSK (formerly GlaxoSmithKline) underperformed due to their exposure to former gastrointestinal blockbuster drug Zantac, which is at the center of a U.S. class action lawsuit. Although sentiment may remain negative until there is clarity on the financial implications for these companies, the share price reactions appear to be pricing in a worst-case scenario and do not account for the potential shared liability given Zantac has been owned over the years by multiple pharmaceutical companies.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/JanusHendersonGlobalEquityIncomeFund_324-1-1.pdfSeptember, 2022
The Fund underperformed both its primary benchmark, the MSCI World IndexSM, and its secondary benchmark, the 85% MSCI ACWI Ex U.S. High Yield Dividend / 15% MSCI USA High Dividend Yield Index, for the quarter ended September 30, 2022.
The Fund’s stock selection in healthcare was the largest detractor from relative returns over the period. Holdings in Sanofi and GSK (formerly GlaxoSmithKline) underperformed due to their exposure to former gastrointestinal blockbuster drug Zantac, which is at the center of a U.S. class action lawsuit. Although sentiment may remain negative until there is clarity on the financial implications for these companies, the share price reactions appear to be pricing in a worst-case scenario and do not account for the potential shared liability given Zantac has been owned over the years by multiple pharmaceutical companies.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/JanusHendersonGlobalEquityIncomeFund_324.pdfJune, 2022
During this turbulent quarter, the Fund’s focus on reasonable valuations, attractive dividends, strong cash flows and conservative balance sheets helped provide downside relief to strong declines seen across global equity markets.
The Fund’s stock selection in communication services contributed positively to relative returns. The holdings in the telecommunications industry were the main driver of outperformance during the period as these companies were viewed as defensive and attractively valued versus other areas of the market.
Also benefiting relative returns was our underweight and stock selection in the consumer discretionary sector. Automotive names outperformed the sector after COVID infections declined in China, which should help to ease production issues for the industry. Holdings in luxury goods also outperformed, benefiting from China’s reopening due to the luxury industry’s high exposure to the Chinese consumer.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/JanusHendersonGlobalEquityIncomeFund_223.pdfOctober, 2021
The Janus Henderson Global Equity Income Fund (Fund) returned 0.25% in October versus the MSCI World ex-Australia (net dividends reinvested) in AUD Index (Benchmark) which gained 1.65% in Australian dollar terms.
This month, the Fund’s holding in Samsung Electronics detracted from returns after the company announced slightly weaker than expected results. The position in medical devices company Medtronic also underperformed after it announced a delay to the launch of one of its key products. Conversely, Spanish utility Iberdrola outperformed after announcing decent results whilst regulatory risks also looked to be receding. The holding in Air Products & Chemicals was also beneficial after the completion of the Jazan joint venture was confirmed on more favourable terms than expected, leading to earnings upgrades
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/181316089.pdfSeptember, 2021
The Janus Henderson Global Equity Income Fund (Fund) returned -2.73% in September versus the MSCI World ex-Australia (net dividends reinvested) in AUD Index (Benchmark) which declined -3.05%.
This month, the holdings in Royal Dutch Shell and TotalEnergies outperformed helped by a rising oil price with Brent Crude achieving its highest level in 3 years. Financials Bawag, ING and Axa also outperformed aided by the rising bond yield environment which has a positive impact on bank and insurer profitability. Conversely, the exposure to utilities Enel and Iberdrola detracted from returns after the Spanish government announced plans to impose a €2.6bn windfall tax on companies that have benefitted from the surge in Spanish electrictity prices. Clothing and apparel retailers VF Corp and Topsports also underperformed as investors reassessed the short term outlook for consumer demand given the inflationary environment and ongoing COVID-19 restrictions in some parts of the world.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/179654747.pdfAugust, 2021
The Janus Henderson Global Equity Income Fund (Fund) returned 0.69% net of fees in August versus the MSCI World ex-Australia (net dividends reinvested) in AUD Index (Benchmark) which gained 3.10%.
The holding in luxury goods company Burberry underperformed as the sector came under pressure following comments about the distribution of wealth in China. In our view, this weakness was excessive as we think the measures are likely to be more focused on ultra-high net worth individuals, while the industry is also seeing good growth across regions. As a result, we added to the position. The strong outperformance of low or zero yielding technology stocks such as Apple, Nvidia and Amazon was also unhelpful for relative performance during the month. The positions in insurance group Axa and automotive company Stellantis were positive for performance following the publication of good results.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/178715175.pdfJuly, 2021
The Janus Henderson Global Equity Income Fund (Fund) returned 3.80% net of fees in July versus the MSCI World ex Australia (net dividends reinvested in AUD) Index (Benchmark) which gained 4.03% in Australian dollar terms.
This month, the position in semiconductor intellectual property company Alphawave outperformed after the company highlighted its strong growth credentials and attractive returns profile, as well as its robust balance sheet. The holdings in Anglo American and RELX also performed well after both companies reported better-than-expected results. Anglo announced a higher-than-anticipated $2.1bn interim dividend as well as a $1bn special dividend and a $1bn share buyback programme, whilst RELX benefited from stronger-than-expected 4% organic revenue growth. Conversely, not having exposure to low or no yielding technology stocks such as Apple and Alphabet was unhelpful this month, whilst the holding in TotalEnergies detracted from returns with the sector underperforming. The position in Volvo also underperformed due to concerns about the impact on production of supply-chain disruption
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/175715603.pdfJune, 2021
The Janus Henderson Global Equity Income Fund (Fund) returned 2.10% in June versus the MSCI World ex Australia (net dividends reinvested in AUD) Index (Benchmark) which gained 4.71% in Australian dollar terms.
This month, not having exposure to low or no yielding technology stocks such as Apple, Amazon and Facebook was unhelpful. Some of the Fund’s financials stocks also struggled as bond yields fell with positions in Axa, Allianz, Lloyds and Manulife detracting from returns. Conversely, the Fund’s holdings in pharmaceutical companies Roche, AstraZeneca, Merck and Novartis outperformed. Roche benefited from some good news related to its late stage Alzheimer’s drug which helped the performance of the shares. Alphawave, a semiconductor intellectual property company, Taiwan Semiconductor and Microsoft also outperformed.
During the month the positions in Daimler and Axa were trimmed with the proceeds used to establish a new position in Citigroup. The bank is well positioned to benefit from a recovery in loan growth volumes as the economy reopens whilst bad debt provisions are expected to remain manageable. The company has excess capital reserves and the new CEO plans to exit several underperforming markets with a strategic focus on wealth management. The stock trades at a discount to its US peers and offers an attractive dividend yield of around 3% that is expected to grow in excess of 5% per annum over the next few years.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/174210555.pdfMay, 2021
The Janus Henderson Global Equity Income Fund (Fund) returned 2.06% in May versus the MSCI World ex Australia (net divdideds reinvested in AUD) Index (Benchmark) which rose 1.19%.
This month, the Fund's holdings in automotive company Stellantis, and truck manufacturer Volvo were beneficial for performance. Stellantis, recently formed by the merger of Fiat Chrysler and Peugeot, announced better than expected results due to strong consumer demand for cars and a supportive pricing environment. Volvo also reported robust results with both revenues and profits exceeding expectations, helped by buoyant truck demand. Conversely, the holdings in Taiwan Semiconductor and Samsung Electronics underperformed after a period of strong performance while utilities Enel, Iberdrola and Dominion Energy also detracted from returns.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/172967703.pdfApril, 2021
The Janus Henderson Global Equity Income Fund (Fund) returned 0.76% in April versus the MSCI World ex Australia (net dividends reinvested in AUD) Index (Benchmark) which gained 3.18% in Australian dollar terms.
This month the Fund’s holdings in oil companies Royal Dutch Shell and Total detracted from returns despite a rising oil price. Both companies’ profits beat expectations but Royal Dutch Shell disappointed with regard to its production outlook and slower progress than anticipated on reducing its debt levels. The Fund’s position in Panasonic also underperformed after the company announced the acquisition of the 80% stake in supply chain software company Blue Yonder that it does not own. In addition, the absence of exposure to low or zero yielding US technology stocks, such as Amazon and Alphabet, was unhelpful. Conversely, the holding in consumer staple Nestle outperformed after announcing earnings that were significantly betterthan-expected. Similarly, exposure to Medtronic was beneficial after the company announced
strong earnings and highlighted its attractive growth outlook. Anglo American also outperformed helped by rising commodity prices.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/171282800.pdfFebruary, 2021
The Janus Henderson Global Equity Income Fund (Fund) returned 0.77% in February versus the MSCI World ex Australia Index (net dividends reinvested in AUD) (Benchmark) which gained 1.64% in Australian dollar terms.
The Fund’s holdings in Anglo American and Repsol were beneficial for performance as commodity prices rallied with the oil price gaining +18% on expectations of rising global demand. Banking stocks ING and BAWAG P.S.K also outperformed helped by the rising bond yield environment which has a positive impact on bank profitability. Conversely, stocks less likely to benefit from an economic recovery underperformed. These included consumer staples Unilever and Nestle, and pharmaceutical companies Novartis and Roche. Utilities Enel and RWE also detracted from returns.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/168984491.pdfJanuary, 2021
The Janus Henderson Global Equity Income Fund (Fund) returned -0.58% in January versus the MSCI World ex Australia Index (net dividends reinvested in AUD) (Benchmark) which fell 0.45% in Australian dollar terms.
The Fund’s holdings in Taiwan Semiconductor Manufacturing Company (TSMC), Panasonic and Microsoft were all beneficial for performance. Both TSMC and Panasonic benefitted from earnings upgrades whilst Microsoft reported significantly better-than-expected second quarter earnings driven in part by Azure, its cloud business, and the widespread adoption of Teams as people worked from home. The gambling company Entain also outperformed after it received an unsolicited bid from MGM. Conversely, holdings in financials Zurich Insurance, Allianz and Axa detracted from returns. Coca-Cola also underperformed due to consumer staples being out of favour and an ongoing legal case regarding tax underpayments.
During the month, the position in Entain was trimmed following the MGM bid with the proceeds used to initiate a position in Fiat Chrysler ahead of its merger with Peugeot to become Stellantis. The stock looks cheap relative to its global peers and is expected to restart dividend payments this year alongside returning excess cash to shareholders via special dividends. In the short-term, the outlook for global economic growth remains challenging as governments tackle the more transmissible variants of the virus. However, the longer-term outlook remains encouraging as vaccination programmes gain traction, whilst monetary and fiscal policy remains supportive. Equity markets have performed well but still look attractive on a yield basis relative to bonds. Certain sectors and stocks have been overlooked by investors and now offer a compelling investment opportunity which as active investors, we are well positioned to take advantage of. We continue with our strategy of selecting companies with strong free cash flow generation and valuation support that are well positioned to benefit from a recover in global economic activity.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/164899994.pdfDecember, 2020
The Janus Henderson Global Equity Income Fund (Fund) returned -0.52% in December versus the MSCI World ex Australia Index (net dividends reinvested in AUD) (Benchmark) which fell -0.50% in Australian dollar terms.
The Fund’s holdings in economically sensitive stocks such as paper company UPM-Kymmene, insurers AIA and Travelers, as well as gambling company Entain, were all beneficial for performance. Technology companies such as Samsung Electronics, Taiwan Semiconductor Manufacturing Company and Broadcom also outperformed. Conversely, holdings in pharmaceutical companies Sanofi, Pfizer and Bristol-Myers Squibb underperformed with holdings in Verizon, Unilever and Corning, a communications equipment manufacturer, detracting from returns.
During the month, VF Corp, Burberry and Volvo were purchased. Clothes retailer VF Group, which owns brands such as North Face, Vans and Timberland amongst others, has a strong online presence and offers attractive dividend growth potential, whilst luxury brand Burberry is trading at a significant discount to its peers and will benefit from an increase in consumer spending as COVID-19 restrictions are lifted. Volvo meanwhile is a beneficiary of the electrification transition in the auto sector and will benefit from an improvement in the heavyduty truck cycle. It is planning to introduce hydrogen-powered heavy-duty trucks through its tieup with Daimler-Chrysler within a few years. These purchases were funded by exiting the positions in CyrusOne and GlaxoSmithKline.
In the short-term, the outlook for global economic growth remains challenging as governments tackle the more transmissible variants of the virus. However, the longer-term outlook remains encouraging as vaccination programmes gain traction, whilst monetary and fiscal policy remains supportive. Equity markets have performed well but still look attractive on a yield basis relative to bonds. Certain sectors and stocks have been overlooked by investors and now offer a compelling investment opportunity, which as active investors, we are well positioned to take advantage of. We continue with our strategy of selecting companies with strong free cash flow generation and valuation support that are well positioned to benefit from a recovery in global economic activity.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/163760408.pdfNovember, 2020
The Janus Henderson Global Equity Income Fund (Fund) returned 9.26% in November versus the MSCI World ex Australia Index (net dividends reinvested in AUD) (Benchmark) which gained 7.43% in Australian dollar terms.
The Fund’s holdings in financial companies such as AXA, Allianz, Zurich Insurance, ING and UBS were all beneficial for performance as investors re-evaluated the outlook for global economic activity. The positions in Total, Repsol and Royal Dutch Shell also performed well with the oil price up over 27% during the month. Conversely holdings in Nestle, Unilever, Roche and Bristol-Myers Squibb detracted from returns.
Given the strong rebound in financials, the opportunity was taken to sell the positions in Direct Line and Munich Re with some of the proceeds used to increase the position in AXA and CME, the derivatives exchange. SGS, the global industrial inspection and testing company, was also sold after a period of strong performance with the proceeds reinvested in SKF, a global leader in industrial seals and bearings which is well positioned to benefit from a pick-up in activity levels. Elsewhere the holdings in Cisco, Samsung and Panasonic were also increased. In the short-term, the outlook for global economic growth remains challenging but the longerterm outlook has improved given the vaccine news, whilst monetary and fiscal policy remains supportive.
Equity markets have performed well this year despite the pandemic, but still look attractive on a yield basis relative to bonds. Some sectors and stocks have been overlooked by investors and now offer a compelling investment opportunity which as active investors we are well positioned to take advantage of. We continue with our strategy of selecting companies with strong free cash flow generation and valuation support that are well positioned to benefit as the global economy starts to recover.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/162223068.pdfOctober, 2020
The Janus Henderson Global Equity Income Fund returned -2.31% in October versus the MSCI World ex Australia Index (net dividends reinvested in AUD) (Benchmark) returned -1.13% in Australian dollar terms.
The Fund’s holdings in healthcare companies Novartis, Sanofi and GlaxoSmithKline were negative for performance during the month. While the companies all released robust quarterly earnings results, investors were concerned about the possible effects of healthcare reform following the US election on the sector. The French utility Veolia also underperformed after it announced plans to acquire a stake in Suez, leading to concerns that the company’s debt levels will increase, and that the dividend may not be increased as forecast. Conversely, holdings in technology companies TSMC and Samsung and the insurance company Travellers outperformed following better than expected results.
During the month, the Fund initiated new positions in Pepsi and international gaming company GVC Holdings. Pepsi has continued to deliver good sales and earnings performance despite the pandemic, and pays an attractive 3% yield, whilst GVC continues to deliver strong revenue growth, driven by its online businesses. It is particularly well placed to grow in the crucial US market and continues to generate significant levels of free cash flow. These positions were funded by selling our holdings in pharmaceutical company Johnson & Johnson and insurer Swiss Re.
The short-term outlook for the global economy remains challenging, however there are reasons to be optimistic given the huge monetary and fiscal stimulus announced by central banks and governments. It is more important than ever for investors to be diversified both geographically and by sector. As active managers, we are well placed to look for opportunities in robust companies that can survive the economic downturn and are well positioned to benefit when the global economy starts to recover.
File:ticker: HGI0005AU
commentary_block: Array
factsheet_url:
https://www.janushenderson.com/en-us/advisor/product/global-equity-income-fund/
Under Quick Links ==> Commentary
release_schedule: Monthly
fund_features:
Janus Henderson Global Equity Income Fund seeks to achieve a dividend yield that exceeds the dividend yield of the Benchmark with the potential for long-term capital growth. The Fund may invest in equities (including equity like securities) and cash (such as money market instruments and bank deposits).
- Invests in 50-80 companies with a strong and growing levels of free cash flow.
- Diversified across geographic regions and industrial sectors to maximise returns and mitigate risk to income and capital.
- Currency exposures will not be hedged back to the Australian dollar.
- Considered as a high investment risk/return.
- Suitable for investors who are comfortable to invest for at least five years.
manager_contact_details: Array
asset_class: Foreign Equity
asset_category: Large Blend - Income Dividend Focused
peer_benchmark: Foreign Equity - Large Income Index
broad_market_index: Developed -World Index
structure: Managed Fund