The Henderson Opportunities Trust invests in UK companies with high growth potential and aims to grow shareholders’ money (capital) over the long-term.

What does it do?

Tracing its roots back to 1985, the Trust aims to beat the leading UK stock market index and grow shareholders’ money in the medium to long-term by investing in UK companies that show potential to become substantially larger companies over a three- to five-year period.

How does it do it?

The Trust has a flexible mandate to invest in a range of companies from early-stage start-ups to well-known larger companies, but tends to invest at the smaller end of the spectrum, where many companies are overlooked or under-researched and offer greater growth potential in the long-term.

Why do James and Laura do it?

I aim for out and out capital growth. Technology and industrial companies is where I believe there are some real growth opportunities. There are some very exciting things happening in the UK and it is about finding those companies and putting them in the portfolio.

Investing in smaller, early-stage companies often carries more risk, which is why the Trust’s portfolio contains a relatively longer list of companies than others. I try to play to the Trust’s strengths — it is relatively small and that allows me to buy these smaller companies and make them count, and when the stock improves I can sell that company, and that is the flexibility of running a small companies trust.

Colin Hughes and I manage the portfolio together. Colin has been looking at smaller companies for nearly 40 years and he brings a wealth of knowledge to the management of the Trust. Between us we hope to find good growth stories among the 1200 UK companies in our investable universe.

What are the Risks?

Share prices go up and down. If you sell your shares at a lower price than you bought them, you will have lost money. You should be comfortable with this risk before investing. See Step 2 for more information on risk, if you haven’t already.

Active management techniques that have worked well in normal market conditions could prove ineffective or detrimental at other times.

This Trust is suitable to be used as one component in several in a diversified investment portfolio. Investors should consider carefully the proportion of their portfolio invested into this Trust.

The return on your investment is directly related to the prevailing market price of the Trust’s shares, which will trade at a varying discount (or premium) relative to the value of the underlying assets of the Trust. As a result losses (or gains) may be higher or lower than those of the Trust’s assets.

The Trust may borrow capital (gearing) as part of its investment strategy. If the Trust utilises its ability to gear, the profits and losses incurred by the trust can be greater than those of a Trust that does not use gearing.

Some of the investments in this portfolio are in smaller companies shares. They may be more difficult to buy and sell and their share price may fluctuate more than that of larger companies.

Source: Morningstar