JHG - Janus Henderson: Further Acquisitions Announced Flows Disappoint Again

2024-06-16 00:59:47 ET

Summary

• Janus Henderson started FY24 with another quarter of disappointing net outflows.
• Product investment performance remains solid, but is not strong enough to remove the net outflow headwind.
• Two new acquisitions confirm that the company has concerns about its traditional business and will increase focus on new product offerings.
• Are there downside risks to ‘democratization’ of investment markets?

Introduction

Janus Henderson Group ( JHG ) has had a pretty good run since I downgraded my rating to Hold in February 2024. As at the time of writing, JHG is up by ~8.5% since the downgrade, which compares to an increase for the S&P 500 of 8.1%. All else being equal, fund managers that have AUM (assets under management) with a heavy exposure to equities will generally outperform when equity market returns are positive and underperform when equity market returns are negative (JHG has 63% of AUM in equities plus additional exposure to the equities asset class via ‘multi-asset’ products). With that in mind, JHG’s outperformance of the S&P 500 is not at all surprising, and it could certainly be argued that the JHG share price has underperformed relative to its expected leverage (or beta) to equity markets....

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