Interim Management Statement

RNS Number : 8047N

Henderson Diversified Income Ltd

24 February 2009

 

HENDERSON DIVERSIFIED INCOME LIMITED

24 FEBRUARY 2009

HENDERSON DIVERSIFIED INCOME LIMITED

Interim Management Statement 

Review of the period from 1 November 2008 to 31 January 2009 

MATERIAL EVENTS OR TRANSACTIONS DURING THE PERIOD

Review: Over the three months to 31 January 2009 three month LIBOR fell from 5.84% to 2.16% which will reduce the absolute level of income earned by the Company given our income target of 1.25% over LIBOR. This will be reflected in a lower level of dividend paid. As a consequence, a policy of gradually locking in attractive fixed rate coupons on long maturity bonds from investment grade companies and reducing the proportion of floating rate assets in the portfolio has been a consistent feature of our investment strategy. Over the period, gearing fell from 15.3% to 7.5% of net assets. We have remained nervous of a further deterioration in sentiment as no clear framework for controlling the global financial crisis has yet been formulated. However, gearing will be increased again as attractive opportunities arise particularly in investment grade bonds.

Dividends: a fifth interim dividend of 2.00p per ordinary share in respect of the period ended 31 October 2008, was paid on 31 December 2008 to holders registered on 12 December 2008.

A first interim dividend of 1.75p per ordinary share, in respect of the year ended 31 October 2009, was declared on 24 February 2009 and will be paid on 31 March 2009 to holders registered on 13 March 2009.

Share Price:  Over the period the share price fell from 68.0p to 53.3p whilst the share price premium to net asset value fell from 12.2% to 0.8%.

There are no other material events or transactions to report.

PERFORMANCE AND FINANCIAL HIGHLIGHTS

Performance to 31 January 2009 

	1 month	3 months	Since launch
Net Asset Value Total Return per ordinary share	-4.25	-9.74	-41.37
Share Price Total Return per ordinary share	-12.34	-19.13	-42.12

The Fund was Launched in July 2007

Source: Datastream

Financial Position 

	at 31 January 2009	at 31 October 2008
Net assets	£44m	£51m
Net asset value (cum income)	52.9p	60.6p
Ordinary share price	53.3p	68.0p
Premium	0.8%	12.2%
Gearing	7.5%	15.3%
Yield	9.88%	10.51%
Total Expense Ratio	1.43%	1.43%

THE PORTFOLIO

Top 10 Investments	Country	% of portfolio	% of portfolio
		at 31 Jan 2009	at 31 Oct 2008
Imperial Tobacco Finance 8.125% 15/03/2024	U.K.	3.5	2.6
Bauch & Lomb (secured loan term B)	Euro	2.9	2.3
Infonxx (secured loan term B)	Euro	2.9	2.4
Kabel Deutschland 10. 75% 01/07/2014	Germany	2.8	1.7
Almatis (secured loan C)	Netherlands	2.7	2.7
Kabel (secured loan B & C)	Germany	2.6	2.0
Molnlycke (secured loan B & C)	Euro	2.4	1.8
AZ Electronics (secured loan B & C)	Euro	2.4	2.1
Orangina (secured loan term B)	Euro	2.2	1.9
TNT Logistics (secured loan term B)	Netherlands	2.2	1.5

Sector Breakdown	% at 31 January 2009	% at 31 October 2008
Secured Loans	58.7	68.2
Investment Grade Bonds	27.1	23.8
High Yield Corporate Bonds	13.1	7.4
Credit Default Swaps**	1.0	0.6
Unit Trust	0.1	0.0

**The total gross exposure to short and long risk positions in credit default swaps at 31 January 2009 was £10.1 million (31 October 2008: £12.9 million).

The objective of Henderson Diversified Income Limited is to provide Shareholders with a high level of income and capital growth over the long term.

The Company aims to deliver these objectives for Shareholders by investing selectively across the full spectrum of fixed income asset classes including, but not limited to, secured loans, asset-backed securities, investment grade corporate bonds, high yield corporate bonds, unrated bonds, gilts, preference and selective high yield equity shares, hybrid securities, convertible bonds and floating rate notes.

Further information on the Company, including an up to date NAV and share price information, can be found at http://www.hendersondiversifiedincome.com

For further information, please contact:

Jeremy Hamon Company Secretary Telephone: [phone]	James de Sausmarez Director Head of Investment Trusts Henderson Global Investors Telephone: [phone]
Sarah Gibbons-Cook Investor Relations and PR Manager Henderson Global Investors Telephone: [phone]

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