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[ JANUS HENDERSON ]
18 / 19
Ben Lofthouse, Fund Manager of Henderson International Income Trust,
shares his view of overseas income markets and the momentum behind
global dividend growth
Sharing the spoils
of global income
markets
I
t’s been a fascinating year so far
with a lot of the trends around
economic growth continuing,
which has led to some changes in
the global macroeconomic landscape.
There have been some notable
surprises, too. One of those was
the US corporate tax cut, which
has made life a lot more profitable
for US companies with domestic
earnings, which I think has received
less attention than the repatriation
element of the legislation for overseas
dollars. Whichever way you look at it,
we are seeing strong earnings growth
in the US, partly as a result of these
tax reductions.
The other big surprise is the
extent to which politics has acted
as a destabilising force on markets.
Against a backdrop of relatively good
economic growth, we have had two
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or three significant events. Firstly,
the President of the United States has
been much more forceful than many
of us expected on trade, and while so
far this has not had a direct impact,
it has certainly caused regions like
China, Asia and, to some extent,
Europe, to underperform.
Another thing we’ve seen is an Italian
election which resulted in two parties
taking power that weren’t expected
The US is the biggest
exposure that we have at
about 31% of the portfolio,
so we have been pleasantly
surprised by the tax cuts,
which have been beneficial
to the companies we own
to and some of their communication
has led to significant uncertainty
once more around Europe. Although
the European economy has been
OK, we’ve seen destabilisation in
European stock markets, particularly
in financials. The underlying
economic data has been quite good
but sentiment-wise and in terms of
political news, it’s become a tough
environment to sit with.
Performance, politics and profits
At Henderson International Income
Trust (HINT), we haven’t made any
particularly large changes to the
portfolio this year. The US is the
biggest exposure that we have at about
31% of the portfolio, so we have been
pleasantly surprised by the tax cuts,
which have been beneficial to the
companies we own and we have seen
good earnings growth coming from
there. Earlier in the year we reduced
some of our exposure to companies
that had performed well in recent
years, in particular Asian growth
companies where we were able to
realise some very attractive profits.
These changes have derived from
valuation changes rather than
macroeconomic concerns and in the
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