Analysis of Henderson Opportunities Trust (HOT) by Edison Investment Research

Edison Investment Research Limited recently reviewed the Henderson Opportunities Trust (HOT), highlighting its strategic investment in small, potentially high-growth UK companies. The trust pursues long-term growth by capitalizing on newer businesses poised to become leading entities in their sectors. Despite a history of underperformance over the past three years, improvements have been observed since October 2023, marking the beginning of HOT’s FY24.

The review notes a positive shift in the interest rate cycle and an increased performance in HOT's net asset value (NAV), which showed an 18.6% total return. This performance exceeds its broad market benchmark by 4.3% and the NSCIAEX index by 2.4%. Although the future remains uncertain for the small and medium enterprise (SME) sector, HOT's managers are optimistic, citing low valuations and potential for a robust recovery towards traditional profit margins and valuations.