Volckaert rejuvenates Global Trust
Wouter Volckaert has turned around performance on the £167m Henderson Global Trust following an overhaul he has been implementing since he took over a year ago.
Mr Volckaert started managing the trust in February 2014 after the retirement of manager Brian O’Neill, who had run the product for 30 years.
Under Mr Volckaert’s management, the net asset value (Nav) on the trust has increased by 14.5 per cent, while the share price has risen by 17.3 per cent.
In addition, the discount to Nav on the trust has tightened by almost two percentage points, up to 7.5 per cent at the end of January 2014 from 9.4 per cent at the end of January 2013.
The vehicle now ranks in the second quartile of its peer group, the Association for Investment Companies Global sector, having been in the bottom quartile in the previous year.
The positive swing in the trust’s performance is due to some key changes Mr Volckaert has made, such as a regional allocation overhaul.
When he took over the portfolio it had an overweight position in the UK compared with its benchmark and was underweight North America, a situation he wanted to swap.
At the time, the trust had about 21 per cent in the UK, but he has slashed this allocation by roughly 7 percentage points to around 14.5 per cent.
Meanwhile, he has added an extra 9 percentage points of his trust to stocks in the US, which now makes up 49.3 per cent of the portfolio, its January factsheet shows.
Mr Volckaert said: “I was optimistic on the US. I suspected some strength in the US dollar – not as strong as it has been – but I wanted to add and that has helped performance during the past year.”
The dollar has been strengthening in the past couple of months and is maintaining this trend after continually strong economic data from the US.
The country’s equity market was also one of the best-performing global markets in 2014.
Two recent US stocks Mr Volckaert has bought are bargain variety stores chain Dollar General and Western Digital, one of the world’s largest manufacturers of computer hard disk drives.
Dollar General is now his top holding, making up 3.3 per cent of the trust, while Western Digital is the fourth-largest holding at 2.8 per cent.
The manager said he was hoping to cut his UK holdings further so it was neutral to the trust’s benchmark, the MSCI All Country World index, which has slightly more than 7 per cent.
“It’s not that I’m negative on the UK economy, but I’m a little worried about having an overweight coming into the elections,” he explained.
“The market tends to react in the very short term. Investors only started worrying about the Scottish elections last year when it was two weeks before [polling day], and I expect it to be very similar when it comes to [this year’s] general election.”
However, he said he was waiting for “better exit points” than the market currently offered.
Volckaert sells out of previous ‘star performers’
When Wouter Volckaert took over the Henderson Global Trust last year he set out several goals for the product, including stronger stock conviction.
Mr Volckaert said the trust’s portfolio now comprised about 71 stocks, down from around 76 when he first started running the portfolio. The manager aims to reduce this further to between 60 and 65 stocks by the end of this year.
Some of the stocks he had sold out were the previous “star performers”, as the tailwind that was driving those stocks – easy monetary policy – had started to slow.
Among those stocks were Vodafone, BBA Aviation, Burberry, Buru Energy, Canon, Legrand and Prada.
As part of his drive for higher conviction, Mr Volckaert said he had increased the weighting of his top-10 holdings, up to 26.3 per cent of the portfolio from 21.7 per cent.
