Trustnet Magazine Issue 48 FEBRUARY 2019 | Page 22

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consumers
has not
risen sharply,
takeover activity
is muted and
corporate capital
expenditure is only just
beginning to recover.
Inflation isn’t rampant and
interest rates remain low, all of
which are contradictory to the
classic indicators of a looming
global recession.
But stock markets fell sharply
over the course of 2018, many
entering bear market territory
in reaction to fears of an imminent
economic slow-down. Is the market
set-back setting up an opportunity
for value investors?
Should we beware the bear?
A bear market, whereby share prices
fall at least 20% from their highs, is
more common than many people
think. Europe was arguably in a bear
market for most of 2018 and there
is little question China has been in
bear market territory since February
last year. For active stockpickers like
ourselves, a bear market provides an
FE TRUSTNET
[ JANUS HENDERSON ]
22 / 23
opportunity
to get ahead
of the market
by buying strong
businesses at attractive
valuations, with a focus on longer term
outperformance. A degree of volatility
is normal in equity markets as they are
discounting mechanisms for investors’
views of future returns.
The US market is one of the few to buck
the trend, albeit December’s fall puts it
closer to bear market levels. The major
US stock market indices hit 10-year
highs in 2018 but the correction over
the last quarter is a sign that valuations
may have peaked. That isn’t necessarily
a bad thing. When prices come down,
opportunities arise and value-driven
opportunities return to the market.
Cautiously optimistic
The enormous advantage for The
Bankers Investment Trust is that the
management
team is
unbound by
geography, sector,
market capitalisation
or style. That means the
portfolio can be designed to cherry-
pick the best companies around the
world to meet our objectives, which
are to beat the FTSE World Index
and achieve annual
dividend growth greater
than the rate of UK
inflation.
The portfolio’s
geographic diversification and
balance between income and
growth-oriented strategies provides
the Trust with a great balance. This
is only possible with a management
team containing regional experts,
each with different expertise and
styles.
While it appears difficult to forecast
political events with any conviction,
the state of the global economy is
not broken. Confidence is currently
low, but this is a good starting point
to make investments, especially as
valuations are now below their long-
term averages. We are being careful
in taking on new positions, but are
increasingly seeing opportunities that
attract us and that we feel will deliver
excellent long-term returns.
These are the views of the author at the time of publication and may differ from the views of other
individuals/teams at Janus Henderson Investors. Any securities, funds, sectors and indices mentioned within
this article do not constitute or form part of any offer or solicitation to buy or sell them.
Past performance is not a guide to future performance. The value of an investment and the income from it
can fall as well as rise and you may not get back the amount originally invested.
The information in this article does not qualify as an investment recommendation.
Issued in the UK by Janus Henderson Investors. Janus Henderson Investors is the name under which
investment products and services are provided by Janus Capital International Limited (reg no. 3594615),
Henderson Global Investors  Limited (reg. no. 906355), Henderson Investment Funds Limited (reg. no.
2678531), AlphaGen Capital  Limited (reg. no. 962757), Henderson Equity Partners Limited (reg. no.2606646),
(each registered in England and  Wales at 201 Bishopsgate, London EC2M 3AE and regulated by the
Financial  Conduct Authority) and Henderson Management S.A. (reg no. B22848 at 2 Rue de Bitbourg, L-1273,
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