Strong manufacturing PMI for China: |
First bought into this in May 2017. Have added on 35 separate occasions since. Highest price paid £3.70, lowest price paid £2.13. Tomorrow, all being well, once my dividend is banked I'll be at break even.
Not my best investment! |
ShareSoc is hosting a webinar with #Henderson Far East Income Limited(HFEL) on 05/6/24 at 5pm, which may be of interest to current shareholders or potential investors. Sat Duhra (Portfolio Manager) will be presenting. You can register here: |
Well chart wise it certainly looks considerably better than it did last year!To be honest if you are getting around 10% yield then as long as you are not losing capital ( important point!) then any capital gains are a bonus. |
It wasn't so long ago they were pivoting away from China and more towards India New manager though .... |
Yes the commentary says they've added two Chinese banks and a Property Company. Hmm!! Fair enough, they're the experts |
added a few more yesterday at 10.22% yield (based on 24.4p per annum div). Thanks for all posts above, mostly helpful. |
Until about a year ago HFEL traded fairly regularly at a premium. The only other IT I currently own that trades at a premium is BIPS. I guess in both cases the price is to some extent predicated on the expectation of falling interest rates and an attractive yield. |
The problem for me is that it's a bit of an outlier at the moment. Most investment trust, in fact 90% + are trading at a discount to NAV. For some reason this is out of line. Probably due a pull back imo. If I was a buyer I'd wait. |
The problem for me with that metric is that the 14.3% PRC excludes Hong Kong,which for me is an artificial distinction, and that adds another 11.0%. |
Believe ~18% is invested in China. |
Divi being maintained through thick and thin (so far) = big tick
~12% YTD - not to be sniffed at.
Things are looking up :) |
Why do we think this trust is rated at a premium? Performance, as we have all debated and acknowledged has been awful and the dividend level looks less secure than in the past. The improved outlook for China seems to me to be the driver, yet it has little direct relevance to HFEIL |
Decent recovery here back to a premium over nav |
Worth a look at an alternative -AASC is also giving a divi of 2.25% plus at 96p pays out in one year 100p but also gives the holder the right to convert into ord. AAS shares at 293p. The AAS share price is only 3% below that level currently, at 284p, and trades about 14% below its NAV of 332p. |
After China's Q1 GDP beat forecasts with a healthy 5.3%, April imports add to a trend that suggests internal demand might be starting to recover: |
There you go Kiwi :- |
Yes I used to write "real" options (not the bookie ones) some time ago.
There are so many options strategies you can use but I stopped because I found although it appears a good way of boosting income, when a stock really takes off you lose out and found over time this really cost you.
You are basically increasing income BUT putting a lid on potential gains.So if say a company was taken over or had much better results than expected you would lose out.
Owning a portfolio for a decent amount of time I find a lot of gains can come from a relatively small percentage of stocks that do really well writing call options can put a substantial cap on those gains. |
 I used to make a bit of money selling covered calls (mainly Guinness I seem to remember) in the late 80's. Days before the internet when things were written up on a big blackboard and little calls like mine were often just written off at the end of the day to clear the board apparently. It worked OK the few times I tried it.
Won't allow me to put a proper ink to trust-net !
trustnet.com/news/13412921/are-the-highest-yielding-equity-trusts-a-sound-investment
Best read the whole article but here's bits appertaining to HFEL
"- Others use derivatives to boost their income, selling away some of the potential gain to boost income,” he said. “Again, I’m not a fan, as this blunts the potential total return of the investment.”
“I think this explains Henderson Far East Income, which produces a yield far higher than most competing Asian income trusts yet its long-term total returns are by far the worst in its peer group (an average of 4.7% per annum over the past 10 years compared to 6.6% for abrdn Asian Income – the next worse – and 10.3% for Invesco Asia – the best),” Carthew said.
.......However, there is another factor at play here, both trusts have highish exposures to smaller companies, which have been lagging their larger peers.” |
Or to put it another way.. eh?
Looks like I need to spend time researching what 'call options' are etc. |
We have modified our options strategy to focus largely on writing call options with much less emphasis on writing put options. We feel this will reduce the risk profile of the strategy and has helped to increase income by using smaller positions over a wider number of underlying holdings.
The old strategy used to be to enhance income with writing call options - effectively foregoing some capital gain in a strong market in exchange for extra income up front. It works well in a flat market. Puts were not written much, if at all in, the "old days". I wonder if they got greedy, wrote loads of puts and that then exacerbated a falling market - either having to buy falling shares off others at over the market price or having to buy back the puts they had written in the market to close out the position.
Now they tell us there has been a more than doubling of call writing. So if the market rebounds sharply, as a few Asian countires might, partcularly China, then we will probably underform in those areas again.
This carry on with options writing to enhance income is ok so long as investors understand what they are buying into. It has been a large chunk of income for a long time to cover the dividend. Now it looks like its not even covering the dividend. I'd suggest it is not being explained well enough. |
Likely the sustained 'so far' dividend yield! Hope it continues. |
I'm not sure what it's done to deserve to trade at a premium? When so many , perhaps better run, trusts are selling for quite large discounts?
I suppose I should gladly accept it though. |
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