Henderson Diversified In... Investors - HDIV

Henderson Diversified In... Investors - HDIV

Best deals to access real time data!
Level 2 Basic
Monthly Subscription
for only
Monthly Subscription
for only
UK/US Silver
Monthly Subscription
for only
VAT not included
Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Henderson Diversified Income Trust Plc HDIV London Ordinary Share GB00BF03YC36 ORD 1P
  Price Change Price Change % Stock Price Last Trade
0.40 0.45% 89.00 16:35:21
Open Price Low Price High Price Close Price Previous Close
90.40 88.00 90.40 89.00 88.60
more quote information »
Industry Sector

Top Investor Posts

cc2014: I'll give you a different take EI. Looking at how fast the FTSE has sold off today is telling me investors will be piling into debt soon enough as a safe place to put their money. There does seem to be a seller on HDIV but I can't grumble about that since I've bought some of his shares. As for where interest rates are going I think inflation is going to pick up far faster than most expect. However, the central banks will be ever so reluctant to raise rates even in the face of it. Even it's a sticky stagflation they will just keep arguing it's temporary and not raise rates. Sure they may raise them from 0.1% to 0.25% just to put us on notice of what's coming but that will be about it. Very happy to hold this one in the current circumstances.
cc2014: John Baron runs a subscription service website. He also writes for Investors Chronicle. He's been holding and tipping NCYF for a very long time. Maybe 20 years, I'm not really sure as I don't subscribe to either. Most of these types of tipsters are pretty rubblish but John is one of the better ones and clearly he has a large following. The problem though is one of liquidity. He will have sold HDIV at 87p, 90p, maybe even higher depending on the timing but as we can see you cannot get the same prices if you follow him. This happens over and over with IC. Their published performance is far away from what can be achieved by copying their trades. It will all wash over in a few days. His followers will sell and the instituions will soak them up as they are doing today.
davebowler: As at close of business on 21st November 2012, the unaudited net asset value per share, calculated in accordance with the AIC formula (including current financial year revenue items) was 83.9. Meanwhile RECI news; Real Estate Credit Investments (RECI / BUY / 101.25p) – Interim results to September 2012 n 21.3% NAV total return in H1 – NAV per share rose by 18.2% in the six months to September 2012 with a particularly strong performance in the quarter ended 30 September 2012 driven by bond repayments on the portfolio. In addition dividends of 3.4p (3.1% of starting NAV) were paid in H1. The NAV has been superseded by recent fortnightly factsheet announcements which highlight a further 4.4% NAV increase in the period to 15 November. The NAV total return for 2012 YTD is now +40%. n Bond portfolio offers upside – Despite strong mark-to market gains in the portfolio valuation in the period, the portfolio is still valued at 66% of par at September 2012. The average effective yield on the portfolio is 13.7%. n Bond repayments driving NAV performance – Approximately 20% of the value of the bond portfolio was repaid at par in the period. The average purchase price of these bonds was 82% of par. A further loan was sold post-period end which generated a total return of 13%. Figure 1: Bond repayments post-June 2012 Bond Date of repayment Event TITN 2006-4FS Jul-12 Full repayment of bond with PIK interest following refinancing ELOC 26 Jul-12 Full loan repayment (backed by City of London office property) DECO 2007-E6 Jul-12 Full loan repayment (backed by German shopping centre) INFIN SOPR Aug-12 Full loan repayment (backed by German shopping centre) OMNI Loan Oct-12 (post-period end) Full loan repayment (backed by London residential properties) Source: Company data n Accretive acquisitions – Part of the cash from disposals has been reinvested with net purchases of £7.1m in the quarter to September. The bonds were purchased at an average price of 78% of par and as at 31 October the price had risen to 81% of par. The acquisitions included a €4.2m commercial loan secured against a portfolio of commercial properties in the Netherlands at an LTV of 64.1% and a life of 3.5 years (yield of 17.6%). More recently, the manager has made a £10m mezzanine loan at a 65% LTV (12% yield) backed by a London office property and has identified another £5m loan that it expects to complete in December on similar terms. n 17.6% increase in dividend – RECI has declared a 2.0p quarterly dividend which is in line with the company's policy of distributing 6% of NAV. n Attractive investment pipeline – The manager has identified an attractive pipeline of bond and loan opportunities and it expects to sell down the lower yielding assets in the portfolio to invest further in these assets. 20% to 25% of the gross asset value is expected to be allocated to real estate loans over the next two quarters as RECI seeks to capitalise on the retrenchment of traditional real estate lenders from the market. which should leave the company close to fully invested. n €1.3m return for ERII shareholders – ERII's NAV rose by 7% in the period driven by cashflow generation. ERII held cash of €5.6m at September 2012 of which €3m is segregated in relation to the Newgate 2006-1 residual cashflows and €1.0m is being held back for litigation costs. A dividend of 3.2 cents per share has been declared which equates to a distribution of €1.3m or 12.5% of the current share price. Liberum View: n RECI has delivered a strong set of results for the period to September 2012. The significant level of bond repayments at par in the period demonstrates the robust nature of the company's credit underwriting process. n We believe the current 25.4% discount to NAV is too wide given the strength of the underlying portfolio and the implied prospective dividend yield is 8.0% (based on the company's policy of paying out 6% of NAV). We think this will ultimately see the shares appeal to a wider set of investors and we expect the discount to narrow as an overhang on the shares has been removed. n We note the manager's comments regarding the acquisition pipeline which should enable the company to deliver additional NAV growth given the manager's track record of identifying and capitalising on attractive opportunities.
davebowler: HDIV has c. 50% in Secured Bonds and is at a premium to NAV whereas RECI with most of its assets in Mortgage Backed securities is at a big discount- Liberum view; RECI has today released its bi-monthly fact sheet, in which it announces a NAV per share of 110p as at 31 March 2012. This represents a fifth consecutive reported increase, with NAV per share now up 10% since the start of the year, making it one of the best performers in our coverage universe. In our view RECI is on track to deliver the NAV growth we forecast in February as it continues to benefit from improving sentiment in credit markets, the pull to par effect on bonds purchased at a significant discount to their face value and the gearing provided by the preference shares. Significant volumes of the preference shares have been traded since the start of the year and their price has consequently increased from 92.5p to 97.5p. However, the Ordinary share price has failed to keep pace with the growth in NAV and as a consequence the discount has now widened to 23.6%. Given the mark to market, floating rate nature of the portfolio we believe this is excessive and that the current share price represents an attractive buying opportunity. BUY. n The 2.8% increase in NAV over the second half of March is reflective of broad based fair value gains in CMBS and RMBS assets and the gearing provided by the preference shares. In our note published on 10th February 2012 we forecast NAV per share to grow to 115 pence over the year and on the basis of today's bi-monthly factsheet, this now looks very achievable. However, the share price has failed to keep pace with the growth in NAV and as a consequence the discount has widened to 23.6%, which we believe is excessive. n The investment manager, Cheyne Capital, has over $1Bn of AUM invested in real estate debt and as such RECI benefits from all of the experience associated with an investment team that is much larger than its market cap might suggest. Cheyne Capital continues to actively manage the portfolio and has recently hedged against a widening of credit spreads by entering a €50m short position in the iTraxx Main Index. During the second half of March they have also increased exposure to residential real estate loans to £4m, which now accounts for c.5% of the total investment portfolio. Factoring in the fairly bearish outlook for property capital value growth, we continue to believe that the risk adjusted value opportunity in real estate has moved from equity to debt holders and that given the senior secured nature of its portfolio and comfortable LTV at which the underlying loans are secured, we believe RECI's is ideally positioned to benefit. We also believe that the pull to par effect on the bonds (which are currently priced at c.61% of par) should prove highly accretive to NAV, as will the floating rate coupons received from the bond portfolio. n Returns to ordinary shareholders are also geared by the £47.1m of preference shares, which are currently covered 2.4x by assets and offer an attractive yield to maturity of 8.6% and an income yield of 8.2%. Since the start of the year there has been significant increase in the volume of preference shares traded, which is reflected in the increase in their price from 92.5 pence to 97.5 pence. In our view this also reflects an improvement in investor sentiment towards RECI and as such we would also ultimately expect the Ordinary shares to benefit. n On the basis that the bond portfolio is marked to market, that 56.1% of its value is represented by investment grade credits and that it remains focused almost entirely on the safer havens of the UK and Germany, we believe the current 23.6% discount to NAV is anomalous. In our view, the current share price represents an extremely attractive buying opportunity and we re-iterate our BUY recommendation.
davebowler: washbrook, I take your point but investors are overpaying in buying New City at a premium in my view when this is at a discount - the difference between the two, premium/discount levels, being 10%.
davebowler: If you believe Interest Rates are due to rise from the lowest they have been for 300 years then a starting yield of 7%ish is pretty good especially if you add in the margin of safety that buying below asset value gives you. This article makes a strong case in favour of owning secured variable rate bonds. http://www.investmentweek.co.uk/investment-week/analysis/1563756/why-investors-consider-quality-european-rmbs
davebowler: Gilt market tension favours higher credit exposure John Pattullo John Pattullo joined Henderson Global Investors in 1997 and is Head of Retail Fixed Income, responsible for UK Retail. | 1 December 2009 at 10:00 What do the UK budget, the Bank of England and an impending general election have in common? Answer: they will all have a bearing on the fixed income market over the coming year. The UK is expected to borrow £175 billion in the 2009/10 fiscal year. Whilst the amount itself is serious, of greater concern is the structural deficit between spending and revenue raising ability that it represents. Regardless of the austerity of the next parliamentary term, the coming years are likely to be characterised by heavy net gilt supply to fund the deficit as the chart below shows. Huge increase in gilt supply As the government is forced to compete more aggressively for funding, the yields on gilts are likely to rise. During 2009 there has to some extent already been a creep up in gilt yields, although this has been artificially repressed by central bank buying as part of the quantitative easing (QE) programme. After a strong 2008 the performance of gilts has been poor as represented by the FTSE Brit Govt All-Stocks Total Return Index, which rose a mere 0.6%1 in the first 10 months of 2009 – the decline in gilt prices from rising yields all but cancelling out the income return. In contrast, the Henderson Strategic Bond Fund rose 27.9%1 over this period, justifying our decision to favour credit-sensitive bonds. To say that we remain wary of gilts would be an understatement. We believe that there has been a fundamental transfer of risk from the private sector onto the taxpayer/public sector as a result of the bank bailouts. With net supply likely to remain high we do not view the current yields on gilts as good value. It is interesting to note the dichotomy between the rising gold price (which may indicate investor fear of inflation and monetisation of public debt) and low government bond yields. The second factor, the Bank of England, relates to its role in controlling monetary policy. We do not expect interest rates to rise in the near term since it would be counter-intuitive for the Bank to raise interest rates – a monetary tightening action – while it is still purchasing bonds in its QE programme – a monetary easing action. Nevertheless, as a report by Citigroup Global Markets pointed out in November, the Bank has been poor at forecasting – with a tendency to underestimate inflation and economic growth. This could cause discomfort in the first quarter of 2010 if the annual change in consumer prices breaches the 3% upper limit. Given the government's failure to control the budget deficit, it does not bode well for gilts for the central bank to appear to be slipping in its role as guardian of the value of money. Moreover, it remains to be seen whether the Bank can ultimately reverse QE without ill effect. The third factor, the General Election, might seem a fait accompli but there is increasing nervousness about the result. Six months ago it was a given that the incumbent government would take a drubbing, yet the November by-election victory for Labour in Glasgow North East may suggest otherwise. While the result in this traditional Labour stronghold was never in doubt, the poor showing of the other parties highlights that the Conservatives need to get people out to vote if they want to win a comfortable majority. The worst outcome for the country in economic terms would be a hung parliament since it would delay serious effort to tackle the budget deficit and this could lead to a currency/funding crisis with negative consequences for gilts. In this environment, the high yield market may be a haven of relative safety given its heavy euro-denominated bias. These three considerations chime neatly with our view that there is a "value chain" in the debt markets and that as we move through the economic cycle different types of bond will become relatively more attractive. The table overleaf reveals the direction of credit sensitivity, interest rate sensitivity and liquidity for different types of debt. Credit value chain Given our expectations of a creep up in gilt yields and economic improvement we believe that a low duration strategy that seeks to favour credit risk and avoid interest rate risk is appropriate. Consequently, we continue to favour financials, high yield, loans and Asset Backed Securities over gilts and high-end investment grade. Defaults on high yield bonds may currently be high but this is likely to be yesterday's story by tomorrow. Moody's predicts the global speculative default rate will drop sharply from an expected peak of 12.5% in December 2009 to 4.2% by October 2010. The environment for corporate earnings ought to improve as the global economy recovers and with it the debt-servicing capabilities of companies. Our preference for bonds with a low duration is reflected in where we see value within the corporate bond markets. Last year it was possible to buy Vodafone bonds trading at a 4 percentage point spread over gilts. Today, the spread is 11/2 percentage points. The inherent interest rate risk from the lower spread inclines us to view these bonds as little more than a coupon with no capital upside. This is true of much of the industrial investment grade where tighter yields and longer maturities mean they contain high duration risk. Our preferred investment grade plays are financials and cross-over credit where higher spreads indicate ongoing value. We continue to like high yield bonds although it is necessary to be selective because some recent issues have been priced tightly. For example, William Hill, the bookmaker rated sub-investment grade, issued a bond with a yield to maturity of 71/4% in November yet there are investment grade bonds in the secondary market offering higher yields. We are also using UCITS III sophisticated powers to achieve the desired level of risk tilt in the Henderson Strategic Bond Fund. Through the use of credit derivatives the fund is long credit exposure whilst the use of gilt futures means the fund is relatively short interest rate risk. Consequently, the duration of the fund at 30 October 2009 was only 3.2 years but we are seeking to lower this further. We stated throughout 2009 that gilts offered poor value and that better returns would come from credit-sensitive bonds. As this piece highlights, with several potentially negative events on the horizon for the gilt market our preference for low duration remains undimmed. As we progress through the economic cycle, however, we will rotate the holdings of the portfolio according to where we see value on the "value chain".
ADVFN Advertorial
Your Recent History
Henderson ..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20210420 22:37:58