James Henderson: buy banks

James Henderson, director of UK investment trusts at Janus Henderson Investors, is a fan of British banking stocks.

James Henderson, who (with Laura Foll) manages the Henderson Opportunities Trust and the Law Debenture investment trusts, as well as the open-ended Janus Henderson UK Equity Income & Growth fund, is a fan of UK banks. 

“I like all the UK domestics,” he tells Citywire’s Michelle McGagh. A management change at NatWest “has been really positive“, while “Lloyds has a great franchise and Barclays is a great business and broader than the other two”. Henderson plans to boost the share of the funds invested in the banking sector to more than 10%. Why? He expects that rising inflation expectations and the resulting increase in long-term bond yields should be good for the sector, particularly as the economy recovers. “Banks will lend to companies that will need more working capital... and banks should make a decent margin doing that lending.” 

Meanwhile, banks will also be able to start paying dividends again after the government told them to stop last year in order to preserve capital amid lockdown. In turn that will allow the trusts to keep paying dividends without raiding their capital reserves (investment trusts can retain income and pay it out during leaner periods). 

The shift into banks will be partly paid for by taking profits on “green” stocks, including fuel-cell technology group Ceres Power, which has soared amid investors’ growing interest in clean energy and hydrogen in particular.

Recommended

What is Rihanna's net worth?
Entrepreneurs

What is Rihanna's net worth?

Rihanna became the youngest self-made billionaire in 2022. Here’s how she made her money.
2 Jun 2023
Best savings accounts – June 2023
Savings

Best savings accounts – June 2023

Interest rates have been creeping up - we look at the best savings accounts on the market right now.
2 Jun 2023
Share tips of the week – 2 June
Investments

Share tips of the week – 2 June

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
2 Jun 2023
The best one-year fixed savings accounts - June 2023
Savings

The best one-year fixed savings accounts - June 2023

You can now earn 5% on 1 year fixed savings accounts - the best rate seen in 14 years. We have all the latest rates available now.
2 Jun 2023

Most Popular

June’s NS&I Premium Bond prize draw - are you this month’s millionaire?
Savings

June’s NS&I Premium Bond prize draw - are you this month’s millionaire?

Two fortunate NS&I Premium Bond winners are now millionaires. Find out here if you’re one of them.
1 Jun 2023
The best one-year fixed savings accounts - June 2023
Savings

The best one-year fixed savings accounts - June 2023

You can now earn 5% on 1 year fixed savings accounts - the best rate seen in 14 years. We have all the latest rates available now.
2 Jun 2023
The top healthcare funds to buy
Investments

The top healthcare funds to buy

Increasingly rapid progress in drugs and healthcare technology makes these trusts top tips, says Max King.
1 Jun 2023