Henderson, alongside Fidelity, headed the 2016 FE Alpha Manager list with 10 managers classified as top-decile alpha generators. As returns are becoming more difficult to generate, what is your strategy to keep this going?
Last year was a difficult year. People forget that for two years in a row, markets have not gone anywhere, and there has been a big flow of assets towards passive.
The asset management industry has continued to grow over the past couple of years but the percentage growth in the passive sector has far outstripped the growth in the active management sector.
In Henderson’s case, what we are trying to do is clearly punch above our weight within the active management sector to grow assets under management (AUM).
Fidelity is looking to get into the exchange traded fund (ETF) market. Is that a complete no-no for Henderson?
At the moment it is. One area we are more interested in is active ETFs, which appear to be catching on in the US.
Normally, what happens in the US comes to Europe shortly thereafter, but we are not in a situation right now where we could say, ‘OK, ETFs are the way we are going to go’.
We are trying to concentrate on our knitting, which is delivering performance.
Our results on 11 February show that over three years, 82% of our AUM have outperformed their benchmarks, which, for an active investment management house, is relatively rare.
That is borne out by the number of managers that have attained the status of top-decile alpha generators in the FE Awards. All of our managers try to make an absolute return each year. They are not always going to achieve it, and equity markets have had a particularly difficult start to this year, as has high yield, for example, but our objective remains the same, which is to add value.
In 2015, when most of the indices that we are looking at lost money, including FTSE, 16 of our top 20 funds by AUM posted positive annual returns for that calendar year. We are actually making headway in a market that is difficult to move forward.
