About: Janus Henderson Group Plc operates as an investment management company. The Company provides investment advisors for equities, fixed income, property, and private equity sectors. Janus Henderson Group serves customers worldwide.

Why it is in the portfolio: Janus Henderson is a pure play funds management business. These are inherently scalable businesses, although that can also work on the way down, which is what the market was worrying about when it took a tumble just after the Brexit vote. The market has slowly reconciled the fact that there might be life after Brexit and, especially after the merger with Janus, much of the business is now sourced outside of Europe. This, coupled with the fact that the integration is going unusually well and the benefits of scale are again being seen on the upside. With a healthy dividend pay-out policy, a starting yield of 3.5% and strong growth in free cash flow this can be seen as a strong dividend grower.

Fundamentals: With a tangible turnaround in earnings already underway, the P/E based on next years earnings is a potentially cheap at 11x - making the stock good value even if it misses it's own targets.

What could go wrong: While Janus Henderson has a well diversified stable of products the main risk is that many of them go off the boil at the same time or key managers leave leading to outflows. While it could be argued that skepticism from consumers and advisors over the merits of active management could provide a headwind that may also prove to be cyclical. Lastly, a market downturn could bolster the credentials of active managers but it also materially impacts their revenues which are largely based on the market value of portfolios.