Henderson Far East Income Share Discussion Threads

[brucie5] 26/4/2024 11:31

JCGI is also doing well from a low base though China stocks seem largely friendless. That can be the moment to buy as it was here.

[aleman] 26/4/2024 11:17

Yep - like I said, a reversal of last results' policy. They sound to be making it up a bit as they go along. Last time:

Whilst a number of growth opportunities in markets where we have been
underweight in recent years such as India, Indonesia and Taiwan have
already performed well, there are still significant opportunities in
the years ahead. The nascent improvement in Indian and Indonesian macro-economics
has the potential for a long pathway of growth, the resilience of the
Indian rupee and Indonesian rupiah versus the US dollar this year is
a testament to improved sentiment. Indonesia has begun posting a current
account surplus, growth is strong and the country is set to reap the
benefits of significant infrastructure completion. India is seeing
the benefit of earlier reforms such as the Bankruptcy Code, which has
helped to de-risk the banking system speeding up recovery of bad debts.
In addition, corporates are deleveraging, real estate asset prices
are rising and the uptick in private sector capital expenditure alongside
higher government investment, bodes well for the outlook. Investments
in India have already appeared in our top contributors list for the
period despite the current low positioning. We have added to both markets
and observe more opportunities.

[carpingtris] 26/4/2024 10:35

Aleman - seems they are reducing India exposure anyway?

'We view the current Korean corporate reform as potentially very exciting and added exposure ahead of the official announcements. This was funded by reducing our positions in India where the market had performed well but where we see less upside for our stocks following strong moves. Additionally, Korean stocks are demonstrating higher dividend growth this year.'

[aleman] 26/4/2024 10:24

Just saying. I was not in favour of reducing cheap China to increase exposure to expensive India at an average P/E of over 20 anyway. Selling at the bottom to buy a frothy top at the end of a bull run seems like a good way to make temporary losses bigger and more permanent to me. Other opinions are available.

[hastings] 26/4/2024 10:10

I wouldn't call that a reversal of the more recent strategy. Seems more like a measured response to potential value situations.

[aleman] 26/4/2024 09:57

The report talks about selectively increasing China exposure again.

[scruff1] 26/4/2024 09:06

To what do you refer Aleman?

[njb67] 26/4/2024 09:01

What is your concern Aleman?

[aleman] 26/4/2024 08:18

Already threatening to reverse the recent policy change? What next week?

[uapatel] 25/4/2024 18:29

Henderson Far East Income — Repositioning to raise total returns

hxxps://www.edisongroup.com/research/repositioning-to-raise-total-returns/33520/

Appreciate this is usually paid for info by the relevant company, but thought it might be useful for some.

[aleman] 25/4/2024 15:52

As at close of business on 24 April 2024, the unaudited net asset value per share, calculated in accordance with the AIC formula (including current financial year revenue items and excluding shares held in treasury), was 230.3p. As the Company's shares are now ex-dividend, the dividend has been deducted from the net asset value.

As at close of business on 24 April 2024, the unaudited net asset value per share (excluding current financial year revenue items and shares held in treasury) was 227.2p.


Er, no it hasn't. The 3.1p difference is the same as yesterday. I think they've made a booboo and it will probably be deducted from tomorrow's published number for today. Maybe they should not have added the emboldened sentence until tomorrow and the NAV difference will alter then.

[aleman] 25/4/2024 12:26

Buy-backs are bad for investment trusts. They shrink the size of the invested pool, meaning costs rise as a proportion of revenues so some dividend growth is lost, offsetting the gain from fewer shares in circulation. We've already seen a few small trusts merged into larger ones this year because they have become unsustainably small. Buy-backs would just accelerate the trend. Do we really want poorer dividend performance and fewer trusts to choose from?

[kenmitch] 24/4/2024 17:03

Thanks for the good wishes Hastings. Not well but hopefully getting there.

Fair point about HFEL share price performance being enhanced by reduced discount. NAV is up around 10% from the low though, so definite hints of improvement.

There are STILL so many shares and Investment Trusts paying huge and often sustainable dividends, reflecting the undervaluation of a lot of UK shares. E.g just today Serica surprised by paying a 14p final (7% just for that 1 dividend) and the overall dividend is 11.5% and higher than last year.

Here’s a bit of info for those keen on seeing dividend cuts and more buybacks. Our portfolios have now reached the stage where all new investments can be paid for from the dividend income month after month.

AND it means the portfolios now fund themselves too.

And right now is still a good time to build a portfolio of shares and Trusts paying exceptionally high and sustainable dividends. It’s only when the dividends flow in like the current 10.4% HFEL yield, that we investors seem to realise what a bonus they are.

[2sporrans] 24/4/2024 14:13

kenmitch

you have to factor in that that 12% share price uplift was accompanied by a shift [mostly the past few weeks] from 4% discount to 2% premium; therefore just a 6% rise in NAV over those 6 months.
Some investors pay close attention to the NAV performance.

On the +ve side, you could argue that HFEL is yielding about twice what av. of peers payout; so maybe, as much as 3% EXTRA yield over 6 months, had one bought at last autumn lows. [HFEL yielded ~12% at its October nadir.]
Taking your 12% cap. gain and adding 6% for 2 divvis makes a TR of 18%, from the nadir.

It will be interesting to see how close to 6p the share price drops at tomorrow open; moreso if the premium fades over the next week or 3.
Perhaps it will......maybe it won't.

[brucie5] 24/4/2024 14:08

HFEL going great guns; and BRWM looking distinctly promising as well.

[hastings] 24/4/2024 13:31

Good post Ken, nice to see you here and hope you're keeping well.

[kenmitch] 24/4/2024 13:25

The dividend looks secure. Read page 3 of the factsheet for why.

What many investors might have missed is that this year HFEL has gone from being by far the worst sector performer to the BEST performer. It’s up 12% over 6 months and next best AAIF is up 10%. HFEL has also outperformed them all over 1 month and year to date.

And the dividend is still 10.4% with next ex 6.1p quarterly dividend tomorrow.

[carpingtris] 24/4/2024 12:46

If the share price and NAV increase then the yield comes down naturally and therefore a rebase isn't needed? Am I missing something?

[bluemango] 24/4/2024 12:43

If they rebase the dividend, you can say goodbye to the current momentum and uptrend.

[speedsgh] 24/4/2024 12:25

Encouraging share price performance since end of last year but we have been here before (cf. Q4 2022) so not out of the woods yet. Really need to break out of the long term downtrend dating back to the high in mid-2019 to confirm reversal.

I would be happy for the dividend to be rebased to a more sustainable level if required, even if it means giving up their 'Next Generation of Dividend Heroes' status. While income will be a primary focus for many here, it seems sonewhat pointless if the income consistently forms part of a negaive total return.

Fingers xxd that the current momentum can be maintained.

[panshanger1] 24/4/2024 11:16

That's a fair call I've also held AAIF for many years aswell as DIG and MUT from an old Aberdeen investment trust plan which did very well for me Does look like the holdings here are being reshaped Can't help thinking the yield will be rebased at some stage - still have a reasonable holding though and hoping for better times (TR)

[panshanger1] 24/4/2024 11:09

Ex div tomorrow

[2sporrans] 24/4/2024 11:04

panshanger

now on a premium of ~2%.

sp risen to 234p; NAV declined a little further to 226p.


decided, this am, to sell ~45% of my holding; the above being the immediate spur.
tbh, i remain skeptical that Sat [Durha] is going to do much to improve the relative performance of the fund, which in Total Return terms has been abysmal over any timeframe of a year or more since the pandemic collapse, early 2020.

trade was lucky enough to coincide with a bit of a dip in AAIF; so i reallocated 90+% of the HFEL proceeds into that.
AAIF also goes XD tomorrow.
A mere 5.7% yield but the divi has been rising much faster than HFEL's and far better TR.
Plus, its on about 11% discount to NAV.

Still have over £45k in HFEL.
See how it goes over the next year, especially relative to peers.