Janus Henderson Absolute Return Fund on Barclays PLC
Thesis
The fund increased its Barclays position because it sees a disconnect between the share price and the bank's earnings and returns potential. The idea is a valuation-reversion long in which operating fundamentals are stronger than the market price implies. The broader UK bank book was volatile ahead of potential policy measures in the Autumn Budget, which remains an important near-term risk. ([London Stock Exchange][17])
“we continued to see a disconnect between the share price and the earnings and returns potential of the business.”
Key risks
- Potential policy measures affecting UK banks ahead of the Autumn Budget
- Bank-sector earnings or returns fail to justify the perceived valuation gap