Janus Henderson Hrzn Euroland A2 EUR |
Morningstar's Take
|20/11/2023by Ronald van Genderen
| This strategy benefits from a skilled and highly experienced lead manager, who has self-developed a time-tested and methodical approach. His successful and consistent execution of this valuation-aware approach earns the strategy an Above Average Process Pillar rating. Reservations regarding workload and key-person risk keep the People Pillar rating at Average. Lead manager Nick Sheridan is a skilled investor who boasts almost four decades of relevant experience, which gives him a wealth of knowledge on eurozone stocks. He sits within the well-regarded and experienced 12-member pan-European equity team of Janus Henderson. Other portfolio managers generally follow the recommendations of analysts who are embedded in the team, but Sheridan tends to use them mostly as a sounding board. His stock selection is more guided by his own research. That raises concerns on his workload, especially because he has some involvement in the Global Smaller Companies strategy as well. Key-person risk is an additional consideration as he is the sole manager of the strategy. Sheridan employs an approach that he developed himself and already implemented at his previous employers, first in 1990. At its heart lies a proprietary quantitative analytical model that he strictly adheres to, making the process methodical and repeatable. While we think the model has proved its effectiveness, the approach’s real edge lies in Sheridan’s disciplined usage of it and consistent execution of the process. The approach prefers stocks that are cheaply valued but with strong business franchises, and quality growth names that Sheridan thinks are undervalued. Indeed, this valuation awareness and valuation discipline place the fairly concentrated 40- to 50-stock portfolio typically in the core-value and core quadrants of the Morningstar Style Box. Sheridan preferably invests in well-established companies, which he finds along the entire market-cap scale. The portfolio has little allocation to the lowest end of the market-cap scale. Still, it does show a structural tilt toward mid-caps with around a fourth of the portfolio invested in this space, more than double the allocation of the eurozone large-cap equity Morningstar Category average and Morningstar Developed Markets Eurozone Index category benchmark. Sector allocations largely follow bottom-up stock selection, although Sheridan’s leeway is capped at a deviation of 15% from the MSCI EMU Index strategy benchmark, but typically allocations don’t differ that much. Sheridan has achieved a commendable long-term track record on this strategy, outperforming both the category average and benchmark. Its risk-adjusted performance profile is above average as well, despite higher standard deviations caused by the portfolio’s concentration and size and style characteristics. These latter two features have caused headwinds over Sheridan’s tenure, but he successfully overcame these with positive stock-selection results. |
A highly experienced manager effectively executing his time-tested approach.To find out how Morningstar rates a fund click here.
| Morningstar Pillars | |
| People | Average |
| Parent | Average |
| Process | Above Average |
Morningstar Medalist RatingMorningstar assigns the Medalist Rating to funds that are qualitatively and quantitatively assessed through manager research and algorithmic processes. The assessment turns on three key “pillars” – People, Process, and Parent – that yield an estimate of how well a fund will perform before fees but after adjusting for risk.
|
| Morningstar reserve its rights to charge for access to these Ratings and/or Rating report. |
|
| Permissions/Reprints E-mail Morningstar |
