Janus Henderson Absolute Return Fund on SSE plc
Thesis
The fund increased SSE after higher bond yields drove share-price weakness. The managers view that weakness as an opportunity to gain exposure to the company's long-term asset-growth potential at a more attractive entry point. The pitch is that rate-driven de-rating has created valuation upside without changing the long-duration asset-growth story. ([London Stock Exchange][19])
“recent share price weakness driven by higher bond yields has, in our view, created an attractive opportunity to gain exposure to the company's long-term asset growth potential.”
Key risks
- Further increases in bond yields could continue to pressure valuation
- Long-term asset growth may not materialise as expected