Janus Henderson Global Equity Income Fund (HFQTX) Hangs Tough

A focus on dividend payers and defensive stocks has kept the Janus Henderson Global Equity Income Fund afloat in a rough market.

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Value-oriented funds are having a moment, even overseas.

Foreign-stock fund Janus Henderson Global Equity Income (HFQTX (opens in new tab)) – a member of the Kiplinger 25, the list of our favorite low-fee mutual funds – is above water over the past 12 months, despite a selloff in nearly every developed-country stock market around the globe. Its 0.5% return over the past year beat the MSCI EAFE Index, which dipped 11.1% over the same period.

A focus on dividend stocks has helped, as has maintaining a diversified portfolio. Some sectors that had been weak in recent years are now doing well. "We have seen change in the mix of market leaders," co-manager Ben Lofthouse, who runs the fund with Alex Crooke and Job Curtis, said in a recent commentary.

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Materials, mining, and oil and gas companies performed well, thanks to a rise in commodities prices. "Many of these companies generated a lot of cash, paid down debt, and in some cases paid special dividends," says Lofthouse.

Stock in French multinational energy company TotalEnergies (TTE (opens in new tab)), for instance, climbed 29% over the past 12 months. The firm recently hiked its dividend 5% and raised its share-repurchase program to $3 billion from $2 billion announced at the end of 2021.

Meanwhile, some traditionally defensive sectors shone too, including healthcare. Shares in U.S. drugmaker Bristol Myers Squibb (BMY (opens in new tab)) have risen 23% since the start of the year; Merck (MRK (opens in new tab)) stock is up 18%.

The managers look for dividend-paying companies that generate cash, are leaders in their industries and have stocks that trade at sensible valuations. Although 12% of the fund's assets are invested in U.S. stocks, the portfolio holds mostly stocks in foreign developed countries.

Its exposure to emerging-markets stocks is limited to South Korea, where 2% of assets are invested, and Taiwan, with 1.6%. That's partly why the impact of the Ukraine invasion on the portfolio has so far been "small," the managers said.

Over longer stretches, the fund's long-term record doesn't disappoint, relative to peers. It has returned 4.2% annualized over the past five years, ahead of the 3.1% average annual return of its peers, funds that invest in value-priced, large foreign companies.

Nellie S. Huang
Senior Associate Editor, Kiplinger's Personal Finance

Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.