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Henderson has mixed fortunes

Henderson says outperformance of its income & growth and distribution funds over the last three years is down to good stock selection while its cautious attitude to risk held back growth fund performance.

Multi-managers Bill McQuaker and Katy Gladstone have been running the multi-manager funds since June 2005 and have achieved top-quartile performance for the income and growth and distribution funds over this period with returns of 18.1 and 15.8 per cent respectively.

The performance of the growth fund has been less impressive, with returns of 20.9 per cent bringing it in line with the sector average.

McQuaker says the last three years have comprised two investment phases with each req-uiring different investment approaches.

The first two years were in a bull market characterised by market confidence and where performance was driven by equities and credit.

Within that period, the income and growth and distribution funds benefited from good fund selection in UK equities, through holdings such as Invesco Perpetual income and Neptune income. The Blue- crest All Blue hedge fund was also a notable contributor to performance.

The second period began in the middle of 2007 when markets became difficult.

In the fourth quarter, Hend- erson took the view that the bull market was over and as markets became more pessimistic, it was seen as an opportunity to put risk back into the portfolio.

The distribution fund is designed to deliver more income than the income and growth fund so the multi-manager team were looking for funds with a high yield. This led them to the Schroder income maximiser fund, targeting a 7 per cent yield.

McQuaker describes the performance of the growth fund as dull but he stands by its cautious stance.

He says: “We are, by nature, a bit more cautious than some people who run money. We were not willing to take on the risk that our competitors were taking. Our lack of risk appe- tite meant that we strugg- led in rapidly rising mar- kets but our cautious style has caught up.”


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