81% of the trust’s assets are invested in a portfolio of shares, with the remaining 19% accounted for by its independent professional services business
Dividends paid to shareholders in 2024 rose 4.69% compared to 2023
The trust performed well through 2024, rising in value by more than the FTSE All Share index
How it fits in a portfolio
The Law Debenture investment trust aims to achieve growth in capital ahead of inflation, and steadily grow the income it pays to investors over the long term. It primarily does this by investing in a portfolio of shares, with a UK bias, but the trust’s independent professional services business provides differentiation to this.
The trust could form part of a portfolio invested for income or add UK exposure to a broader portfolio.
Manager
Laura Foll joined Janus Henderson in 2009 on the graduate scheme. She was subsequently named a global analyst and later an assistant fund manager on the Global Equity Income Team. Foll has been co-manager of the trust since August 2019.
James Henderson began his career as an accountant trainee at Binder Hamlyn. He joined Henderson in 1983 as a trainee fund manager and has managed a number of investment trusts since 1990. Henderson has been a PM on the Global Equity Income Team at Janus Henderson since 2003 and a co-manager of this trust since June 2003.
Denis Jackson has been CEO of Law Debenture since January 2018, having joined the group in July 2017. He joined from Capita where he was Director of new business development and previously spent almost 20 years at Citigroup.
Process
81% of the trust’s assets are invested in a portfolio of around 150 shares, with a UK focus.
Most of this portfolio, around 80% of it, is invested in UK listed companies, as the managers continue to find attractive value on offer, despite ongoing concerns about the UK economy. Half of this is invested in large companies featuring in the FTSE 100 index, with the rest invested across higher risk small and medium sized companies. However, the managers will invest overseas where a similar company can’t be found in the UK market, or an overseas company is cheaper.
The managers are seeking to identify well managed, high-quality companies with a strong competitive advantage in their chosen market segments, at attractive prices. Though the trust aims to steadily grow the income it pays to its investors over the long term, not every stock held in the portfolio needs to pay a dividend.
Over the year, the managers added new positions in food retailer Sainsbury, fund manager Schroders, and hotel operator Whitbread to the trust’s portfolio of shares.
The remaining 19% of the trust’s assets is accounted for by the independent professional services business (IPS). The IPS business delivers a range of professional services to other businesses to help them manage complex financial and legal obligations.
The IPS business is broadly split into three sections;
Pensions – providing trustee services
Corporate trust - operating internationally to provide trustee services to a broad range of debt issuance markets acting as the bridge between bond holders and bond issuers
Corporate services – secretarial services, structured finance and whistleblowing services
As there are a range of underlying businesses operating in these sections serving different end markets, they are unlikely to all grow at the same pace.
Investors should generally expect the IPS business to account for 20-30% of the trust’s assets.
Investors should be aware the trust can borrow money to invest with the intention of increasing returns (known as gearing), but this could magnify losses in a falling market and increases risk. At the end of the trust's last financial year in December 2024, gearing stood at 10.9%, down from 12.7% a year earlier. The manager can also use derivatives, which if used adds risk.
Get leading investment trust commentary, performance analysis and insight from HL's expert research team.
Culture
Janus Henderson is a large investment firm with offices all over the world. It was formed in 2017 from the merger of two long-established groups – US-based Janus Capital Group and Henderson Global Investors.
It values experience and sharing knowledge and ideas between investment teams is an important part of the culture. Managers have the flexibility to tap into the wider group’s resources for ideas and insights, but also have the freedom to do their own research and form their own views without having a ‘house view’ placed on them.
ESG Integration
Janus Henderson aims to be a responsible steward of investors’ money, and ESG is an important part of this. All fund managers have access to ESG scoring models and customised ESG research, but the firm believes ESG considerations should go beyond examining numbers.
Company site visits, speaking to workers and questioning company management are just some of the ways fund managers are expected to actively assess a company’s ESG credentials.
Investment teams across Janus Henderson actively engage with the companies they invest in, and the firm’s longstanding Responsible Investment & Governance team provides centralised support on voting and engagement.
When it comes to voting, Janus Henderson has a Proxy Voting Committee, which is responsible for establishing the firm’s position on major voting issues and creating guidelines overseeing the voting process. The Committee is comprised of representatives from various business areas, including portfolio management, corporate governance, accounting, legal and compliance. The firm’s full proxy voting records are published annually, although no rationale is provided. There is more detail on voting and engagement, including case studies, in the firm’s annual ESG Company Engagement & Voting Review report and Responsibility Report.
Cost
The ongoing annual charge over the trust’s financial year to 31 December 2024 was 0.51%. Investors should refer to the latest annual reports and accounts, and Key Information Document for details of the risks and charging structure.
If held in a SIPP or ISA, the HL platform fee of 0.45% per annum (capped at £200 per annum for a SIPP and £45 per annum for an ISA) also applies. The HL platform fee doesn't apply if held in a Fund and Share Account. As investment trusts trade like shares, both a buy and sell instruction will be subject to the HL share dealing charges within any HL Account except online deals in a Junior ISA.
Performance
Law Debenture investment trust has performed well for patient investors over the long term. Since James Henderson first became manager in June 2003, the trust has delivered returns of 928.11%* to the end of February 2025, compared with a return of 409.92% from the FTSE All Share index. The trust also has a strong dividend growth record, raising or maintaining the income paid out to investors for the past 46 years, Past performance is not a guide to the future.
Over the trust's last financial year to the end of December 2024, its shares rose in value by 15.9% and its net asset value rose 13.6%, compared with a return of 9.5% for the FTSE All Share index.
Over the year, in the equity portfolio, aerospace and defence company, Rolls Royce and retailer Marks and Spencer were among the top contributors to performance. Rolls Royce benefitted from a recovery in flying hours following the pandemic and a renewed cost focus. Meanwhile Marks and Spencer excelled with a refreshed clothing range moving earnings forecasts higher. Energy businesses AFC Energy and Rio Tinto were the main detractors. AFC Energy’s shares suffered following a slower than expected roll out of its hydrogen fuel technology, while Rio Tinto struggled following a subdued period for commodity prices.
In the IPS business, the corporate trust and corporate services divisions grew at 12.7% and 11.0% respectively, while the pensions division shrunk 4%. This gave the IPS business a 6.2% growth rate for the year.
In the trust's financial year to the end of December 2024, total dividends paid to shareholders amounted to 33.5 per share. This is a 4.69% increase on the 32p dividend per share paid in the previous year.
At the time of writing the trust trades at a premium of 1.68% and has a dividend yield of 3.70%, although remember, yields, like dividends, are variable and aren't a reliable indicator of future income.
Annual percentage growth
Feb 20 – Feb 21 | Feb 21 – Feb 22 | Feb 22 – Feb 23 | Feb 23 – Feb 24 | Feb 24 – Feb 25 | |
|---|---|---|---|---|---|
Law Debenture | 32.40% | 19.01% | 9.24% | -2.98% | 19.10% |
FTSE All Share | 3.50% | 16.03% | 7.30% | 0.57% | 18.37% |