Janus Henderson
Value managers focus on the yield on offer , but often yields are higher whilst underlying valuations are depressed for fundamental reasons
bias tend to favour companies with old business models heavily dependent on traditional economic activity ; small British analogue businesses such as food manufacturer Premier Foods and restaurant operator Pizza Express come to mind . In tough times , companies such as these may not mean revert , with their underlying revenues failing to recover to historical averages . Instead , such businesses may simply go bust . The trust is similarly less likely to invest in the old economy , such as big oil majors , whose fortunes are tied to volatile energy prices . Instead , the team focuses on structural winners , preferring companies like Netflix over physical cinema operators and digital businesses / data centres over physical shopping centres . Even before the pandemic , shopping centres were facing challenges : Covid-19 accelerated these trends . The team ’ s sensible income philosophy also means they prefer to invest in stable businesses with a yield of 4 %, for example , compared with the 6 % yields targeted by those interested in more risky , cyclical issuers . The higher yields from this group are less likely to be sustainable over the long term and carry a greater risk of capital loss . However , by
Issue 81 - February 2022 / 25 /