Henderson Diversified In... Share Discussion Threads

[cc2014] 13/8/2021 09:24

85.3p seemed like a good price to me so added.

I can't figure whether I'm getting drawn into one of those trades or whether someone is giving them away. I think the latter but it would be nice if the share price picked up from here.

[cc2014] 11/8/2021 16:44

Share buybacks

1. 30/06/21 1,210,00 shares at 85p
2. 27/07/21 466,588 shares at 86p

It is my interpretation based on absolutely nothing that either someone sits down near the end of the month and looks at the share price and decides what to do or alternatively they are being scooped up throughout the month by their broker and they do the cross-trade at the end of the month.

Either way it's nice to see a proper discount control policy in action and also nice to see they are paying a sensible price which enhances the NAV.

[cwa1] 11/8/2021 16:12

Sod it! Took a spoonful at 85.78 just to keep me interested and make sure I monitor it carefully.

Suspect it could drift off a little further if there are still hefty sellers out there and I'll review it at that point if it does.

Good fortune to all holders here

[cwa1] 11/8/2021 15:46

I do worry a bit about inflation but Henderson seem unfazed and good to see confidence in the dividend going forward:-

Outlook

Volatility and measures of distress in credit markets are at 15 year lows. Credit markets are priced tight but arguably fairly given the remarkably benign outlook. In this market it is more important than ever that we keep focused on sensible income and not get drawn to illusory "fools yield" bonds where the yield is so high you are almost guaranteed to lose capital. We are very mindful of value traps, illiquid, esoteric and exotic credits. The COVID crisis accelerated many of the existing structural themes we have spoken about in previous reports and if anything, in the longer term we see a more deflationary world. We completely understand the markets obsession with inflation but feel it is predominately a cyclical and transitory phenomenon. The modest rise in bond yields may well give us an opportunity to lock in higher yields for shareholders and, reassuringly, in the current environment we feel the annual dividend remains secure.

[cwa1] 11/8/2021 15:40

It seems like IntegraFin might be the guilty dumping party? They've been responsible for the past two notifications. Brewin Dolphin the one before that. Both of them have quite a bit to go. Hmmmmm.

As you say there's a a fairly active share buyback programme.

From 10/3/21:-

The Company announces that it has authority to repurchase a maximum of 28,678,604 of its ordinary shares (being its outstanding shareholder authority). Such authority lasts until the next shareholder authority granted, or where expressly revoked by shareholders. The buyback may be funded from the Company's resources (including redemptions on funds the Company has invested in and debt facilities). No maximum consideration payable has been determined by the Company, but the Company is unable to pay a price for any shares pursuant to the buy-back which would equate to a premium on the net asset value.

...do you think there is much dialogue between the parties? IF I were a holder I'd be happy enough for them to agree a deal to take out the outstanding rump(s) IF the price was right, rather than let it drip on remorselessly.

I see that there is a change in investment policy being mooted:-

INVESTMENT OBJECTIVE AND POLICY

The Board has recently undertaken a review of the Company's investment objective and policy, initiated by the regulatory requirement to transition away from LIBOR to alternative reference rates by the end of 2021. The Company's current investment objective is to seek income and capital growth such that the total return on the net asset value of the Company exceeds the average return on a rolling annual basis of three month sterling LIBOR + 2%. It is proposed that this will be amended so that the Company's objective is instead to seek a sustainable level of annual income and capital gains consistent with seeking to reduce the risk of capital losses, by investing in a diversified portfolio of global fixed income and floating rate asset classes.


The Company will therefore seek shareholder approval at the Annual General Meeting (AGM) to be held at 11.00am on Thursday, 16 September 2021 to change the Company's investment objective as set. Other minor amendments to the investment policy are also proposed. There will be no imminent or future change in the Company's investment process or strategy as a result of the amendments to the investment objective and policy.

Which all sounds sensible enough if a little more nebulous than the previous policy but I can live with that if the management are capable and trustworthy. I assume this will have been run past major holders and the meeting is probably a rubber stamp job?

Hmmmmm. Interesting

[cwa1] 11/8/2021 11:19

Thanks for that, much appreciated and interesting. Will need to do a bit of thinking now :-)

[cc2014] 11/8/2021 10:55

Hi CWA1.

I guess it depends what you are looking for? I live off my investments and one of the biggest challenges I have is not accumulating too much high yield stuff. I have plenty of NCYF, AXI, NBMI for example.

HDIV has nowhere near the risk or yield of the other 3 funds I've named above, so I'm deciding to accept a lower yield deliberately.

HDIV is very well run fund and it's worth looking through what the investment managers write. I think they are one of the best in the sector. For a very long time they were invested in long duration bonds which gave them great capital gains. They are now reducing this but still the duration is much longer than NCYF for example. I'm not sure this they are reducing the duration fast enough for my liking but over the last 3 years they have called the situation far far better than me and I'm more than happy to invest in managers who have a great track record and just leave them to it.



Having said that if the share price reaches 90p, which is where I think it should be I'll start slicing. Only a few months ago it was trading at 92p above NAV, until John Baron kind of tipped it as a sell (NCYF at the same time). Although I have a lump from around 85p, I've also got a lump sub 80p so I find it easier to run winners. NCYF has come all the way back and more yet HDIV still languishes, partly because everyone is focussed on yield not total returns.


I'm more interested in total returns and a comparison shows AXI and HDIV have been the place to be over the last 3 years. That's not to say things won't change. My data is from the end of July. AXI has moved significantly since. AXI and NCYF have gone XD.

AXI NAV 103.92p, buy price 92.86p, Discount to NAV 10.6%, Yield 6.5%, 3 year performance 8.1% pa

HDIV NAV 93.2p, buy price 86.12, Discount to NAV 7.6%, Yield 5.1%, 3 year performance 8.1% pa

BIPS NAV 195.49p, buy price 187.4p, Discount to NAV 4.2%, Yield 5.9%, 3 year perfomance 7.4%

SMIF NAV 93.36p, buy price 96.88p, Premium to NAV 3.8%, Yield 6.3%, 3 year performance 7.3% pa

NCYF NAV 51.23p, buy price 55.15, Premium to NAV 7.7%, Yield 8.1%, 3 year performance 5.7% pa


Oh and finally HDIV have a discount control policy which they actually employ. They recently bought 1m shares at 85p so that puts a floor under the share price. (which means perhaps I cannot lose on this trade?)

[cwa1] 11/8/2021 10:06

Morning CC2014

I've followed you across from the BIPS board: you have a new stalker :-)

May I ask what the rationale here is for investment?

I can see there's a modest discount to NAV, which I like to see. Assuming the dividend is set fair for 4.4p(I assume it is??), then the yield is a decent but not exceptional 5%.

If I may ask, what do you see as the investment case here. No worries if you'd rather not, of course!

Cheers for any input

[cc2014] 04/8/2021 16:40

buyers paying 89p in the closing auction. Would be nice to see that on the bid tomorrow!

[cc2014] 04/8/2021 09:16

Another couple of weeks goes by and finally the share price seems to have crept away from the 85p area. For weeks it has been possible to buy at just over the bid at 85p (and I have) but now that pattern has changed over the last couple of days.

Buyers paying close to 87p now and the discount to the offer when buying is reducing bit by bit.

I would like to see what happens at 87p. There was definitely a big seller there a couple of days ago. No idea yet whether he's still there or has gone away. Fingers crossed.

[cc2014] 23/7/2021 13:33

NAV makes 93p and the discount to NAV reaches 8% which is the lowest it's ever been in the last 10 years apart from the Covid sell-off and the John Baron sell.

[panshanger1] 06/7/2021 09:13

Thanks CC2014 also watching here and appreciate your comments

[jonwig] 06/7/2021 07:59

CC2014 - no, you have some readers!!

[cc2014] 05/7/2021 14:16

Only me here talking to myself so that's good news as I can get as overly optimstic as I like!

Since the large buyback went through the trade flow suggests to me that either the big seller had only a few left and is now in no hurry and happy to drip them in slowly and get a better price or we are working through some stock that the MM's have left which they took on their own books.

I think probably the latter as the big seller was in such a hurry before.

[cc2014] 30/6/2021 14:57

Notification is given that, pursuant to the authority granted at the Annual General Meeting of the Company held on 15 September 2020 to make market purchases of the Company's own shares of 1p, a market purchase of 1,210,000 ordinary shares in the capital of the Company was made today at a price of 85.00p per share. The shares will be cancelled.

Maybe this will break the back of whoever has been selling.

[rbcrbc] 14/6/2021 11:52

I thought they were supposed to buy in the market if the discount fell below 5% ???

[cc2014] 14/6/2021 10:18

Added this morning at 84.46p. NAV is 91.9p as of Thursday night and is sure to be up on Friday too. Share price seems a bit low to me.

[rbcrbc] 31/5/2021 18:10

Thanks jonwig, my broker HL no longer accepts transfers in to a of certified stocks (due to covid they claim) !

[jonwig] 31/5/2021 14:36

You used to be able to walk into a bank and sell them. No longer, I think.

Open an online account with a broker. Then, rather than sell the cert (expensive), complete a transfer form and send off your cert (tracked mail!) so that your holding goes into your nominee account. Then sell them from there. A lot cheaper, and probably quicker.

[rbcrbc] 31/5/2021 14:08

Hmm, I want to sell some certified shares in this.
Computershare won't do telephone or internet dealing in this stock !
Any ideas how best to go about this easily ?
I'm not especially interest in saving a few extra quid by jumping through hoops.
Just a fast and easy way to sell.
TIA

[cc2014] 30/4/2021 10:06

Struggling to wait patiently now. I really want 90p to sell a few. Perhaps I'd even take 89.5p but despite the constant flow of buys at 88.9p every so often someone drops quite a few into the market at 87.x and we start all over again.

My sense is the buyers will go on forever but this seller does seem to have a few.

[cc2014] 09/4/2021 11:24

It's become clear to me that someone must have sold a huge quantity of these which the market makers have on their books and are slowly shifting.

My rationale for this is that the vast majority of trades are buys over the last 10 days (even those reported as sells) and that slowly as the market maker is reducing their exposure the actual price paid is rising.


I'll wait patiently. I have alot of these and whilst I really like them and I'll be holding most of them long term, I'd really like to sell about 25% of my holding at 90p

[essentialinvestor] 06/4/2021 14:41

Picked up another 10k at 82.8.


If I have this right HDIV looks cheap nearly 9% below NAV
may provide and at least a partial hedge against future equity weakness.

Any Equity weakness looks a far away and distant land atm!.