Interim Management Statement

RNS Number : 1006Y

Henderson Diversified Income Ltd

27 August 2009

 



HENDERSON DIVERSIFIED INCOME LIMITED

27 AUGUST 2009

HENDERSON DIVERSIFIED INCOME LIMITED

Interim Management Statement 

Review of the period from 1 May 2009 to 31 July 2009 

MATERIAL EVENTS OR TRANSACTIONS DURING THE PERIOD

Review: Over the three months to 31 July 2009, three month LIBOR fell from 1.45% to 0.89%, which reduced the level of dividend payable for this period. However, our income target of 1.25% over LIBOR continues to be exceeded. Over the period, gearing rose slightly from 15% to 16% of net assets as the fund continued to pursue opportunities in the secondary market where, during the period, it was possible to buy bonds trading at a deep discount to par value. This strategy will help ensure capital upside potential as the credit market continues its process of healing. Opportunities in the primary market have also been pursued selectively. Cash was sourced from the gearing facility and sale of bonds which have rallied to levels where capital appreciation is limited.

Dividends: a second interim dividend of 1.25p per ordinary share in respect of the year ended 31 October 2009, was paid on 30 June 2009 to holders registered on 12 June 2009.

A third interim dividend of 1.10p per ordinary share in respect of the year ended 31 October 2009, was declared on 27 August 2009 and will be paid on 30 September 2009 to holders registered on 11 September 2009.

Share Price:  Over the period the share price rose from 52.3p to 62.0p whilst the share price discount to net asset value fell from -13.1% to -3.3%.

There are no other material events or transactions to report.

PERFORMANCE AND FINANCIAL HIGHLIGHTS

Performance to 31 July 2009 

	1 month	3 months	Since launch
Net Asset Value Total Return per ordinary share	7.42	25.83	-23.36
Share Price Total Return per ordinary share	5.98	21.20	-28.57

The Fund was Launched in July 2007

Source: Datastream

Financial Position 

	at 31 July 2009	at 30 April 2009
Net assets	£62m	£51m
Net asset value (cum income)	64.1p	52.5p
Ordinary share price	62.0p	52.3p
Premium	-3.3%	2.1%
Gearing	16%	15%
Target Yield	3 month LIBOR + 1.25%*	3 month LIBOR + 1.25%
Total Expense Ratio	1.83%	1.98%

*3 month £ LIBOR was 0.89% on 31 July 2009

Dividends Paid/Declared in Financial Year to date

	Amount	Pay Date	Record Date
First Interim	1.75p	31 March 2009	13 March 2009
Second Interim	1.25p	30 June 2009	12 June 2009
Third Interim	1.10p	30 September 2009	11 September 2009

THE PORTFOLIO

Top 10 Investments	Country	% of portfolio	% of portfolio
		at 31 Jul 2009	at 30 Apr 2009
Imperial Tobacco Finance 8.125% 15/03/2024	U.K.	2.9%	3.3%
Kabel (secured loan B & C)	Germany	2.5%	2.8%
Bauch & Lomb (secured loan term B)	Euro	2.5%	3.0%
Orangina (secured loan term B)	Euro	2.4%	2.8%
Infonxx (secured loan term B)	Euro	2.3%	3.0%
Molnlycke (secured loan B & C)	Euro	2.3%	2.6%
Kabel Deutschland 10.75% 01/07/2014	Germany	2.2%	2.7%
Weetabix (secured loan B)	U.K.	2.1%	2.3%
BNP Paribas 7.436%	Euro	2.0%	1.7%
AZ Electronics (secured loan B & C)	Euro	1.9%	1.8%

Sector Breakdown	% at 31 July 2009	% at 30 April 2009
Secured Loans	50.5	55.7
Investment Grade Bonds	30.6	28.2
High Yield Corporate Bonds	16.3	13.0
Credit Default Swaps**	0.2	0.3
Unit Trust	0.1	0.1
Cash	2.4	2.8

**The total gross exposure to short and long risk positions in credit default swaps at 31 July 2009 was £5.3 million (30 April 2008: £7.5 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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