The Investment Column: Hold on tight to Henderson
Tuesday 22 June 1999
The market looks favourably on Henderson. Investment trusts trade on discount to their net asset value of around 15 per cent. In Henderson's case, it is only 9 per cent. That reflects its 34 per cent annual net asset value growth. Since 1984, when Mr Ashford-Russell created TR Technology, which became Henderson in 1997, he has delivered 26 per cent growth annually.
Booming Internet stocks in the US saw Henderson achieve net asset value growth of 40 per cent last year. The fund is already 10 per cent up on the 30 April year end and it hit a new high on Friday.
Such performance cannot be sustained. Indeed, despite a 50 per cent fall in many Internet valuations since March, there are signs of worse to come. There is a queue of new Internet issues waiting to come to the market - a warning that this is not a good time for new investors to pile in. Since January, technology stocks have gained 30 per cent in value; historically, such gains have been followed by sluggish performance in the rest of the year.
It is no surprise then that since March Henderson's has halved its Internet exposure. But it admits it cannot prevent its asset value going down in the event of a sell-off of technology stocks.
There is, however, a strong long-term investment case for the company. In the past decade the US economy seems to have achieved non-inflationary growth. Technology, especially improved distribution mechanisms, has kept prices competitive. If the rest of the world follows the same deflationary pattern, cyclical stocks will struggle. In a world short of growth stocks, technology stocks offer the rewards of emerging market plays without the political risk. A sell-off this summer would be an opportunity for Henderson to pick up some bargains.
- 2 Saudis risk new Muslim division with proposal to move Mohamed’s tomb
- 3 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 4 Cee Lo Green: It is only rape if the victim is conscious
- 5 Nigerian witch-finder Helen Ukpabio threatens legal action against human rights organisations
Perez Hilton apologises for publishing Jennifer Lawrence naked 4Chan photos
Emma Watson on Jennifer Lawrence naked photo leak: 'Even worse than seeing women's privacy violated is reading the comments'
Ariana Grande nude photos leak: Pictures are completely fake, say representatives
Saudis risk new Muslim division with proposal to move Mohamed’s tomb
Kate Upton nude photos leak: Model's spokespeople 'looking into' authenticity of indecent images
Rotherham child sex abuse scandal: Labour Home Office to be probed over what Tony Blair's government knew - and when
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Ashya King: Parents of five-year-old boy refused permission to visit him in hospital and denied bail at Spanish court
With Douglas Carswell joining Ukip, my party has taken another giant step forward
When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
Ashya King: 'Cruel NHS has not given us the treatment we need', says father of five-year-old with brain tumour who fled to Spain
iJobs Money & Business
£30000 - £45000 per annum + benefits+bonus+package: Harrington Starr: Front-Of...
£700 per day: Harrington Starr: Quantitative Developer C++, Python, STL, R, PD...
£700 per day: Harrington Starr: Java/Calypso Developer Java, Calypso, J2EE, J...
£500 per day: Harrington Starr: SQL Developer SQL, C#, Stored Procedures, MDX...