Portfolio Update

Henderson Diversified Income Ltd
09 October 2007


HENDERSON DIVERSIFIED INCOME LIMITED

HENDERSON GLOBAL INVESTORS

9 OCTOBER 2007


                      Henderson Diversified Income Limited

Portfolio update

The Board of Henderson Diversified Income Limited ('HDIV' and the 'Company') is
pleased to report that its portfolio managers, John Pattullo and Jenna Barnard
(the 'Managers'), have invested approximately 96% of the proceeds of the
Company's initial public offering in a broad portfolio of senior secured loans,
high yield and investment grade corporate bonds.


The Managers  believe that the Company's initial portfolio has been acquired at
attractive prices and relatively high yields and that accordingly the Company is
well positioned to deliver a high level of income and good prospects of capital
growth for its Shareholders.


HDIV was launched on 18 July 2007 with the admission of 40,500,000 shares to
trading on the main market of the London Stock Exchange. Net proceeds of
£39,831,750 were raised at launch.


As at the close of business on 8 October 2007 the Managers had invested
approximately £38 million (approximately 96% of net assets) with the remainder
held as cash. It is expected that the Company will draw down on a credit
facility in the short term, initially up to 10% of net assets but with the
flexibility to increase gearing to 20% subject to the Board's discretion.


Initial asset allocation

The movements in credit markets during the summer of 2007 created compelling
opportunities for the Company, which remained fully invested in cash from launch
through to the beginning of August.



Cash was at a premium throughout the summer and the Managers have been in the
fortuitous position of investing in target companies at higher yields and at a
faster pace than had been originally anticipated prior to the launch of the
Company.



No asset class within the credit market proved to be immune to the sell-off. The
rapid withdrawal of leverage affected many market participants: the common theme
has been of forced selling associated with the unwinding of leveraged investment
strategies. In this environment price movements on individual investments became
dislocated from the underlying credit quality of such investments.



Indiscriminate selling has, in the view of the Managers, created opportunities
particularly within the secured loans market where spreads remain very
attractive compared to high yield and investment grade corporate bonds. The
Managers expect to retain the emphasis on secured loans within the portfolio for
the foreseeable future.



The Company's asset allocation and the yield profile of the portfolio is
summarised as follows:




Asset class        Allocation        Allocation 8   Average yield on Target allocation Initial allocation
                   8 October 2007    October 2007   acquisition cost                   expected at IPO
                   (£ millions)      ( %)            (%)                 (%)            (%)
                                     
                                                         
Secured Loans            28.1              71             8.75              75               50-65


Asset Backed               0               0              n/a                0               10-25
Securities

High Yield                7.8              20             8.75              20               10-25
corporate bonds

Investment Grade          2.1              5              7.50               5                0-15
Corporate Bonds

Net cash                  1.8              4              n/a                0                 0

Secured loans

The Company has made 55 investments in secured loans issued by 33 different
corporate borrowers across a broad range of European, US and UK industry
sectors. These loans were acquired at an aggregate cost of £28.1 million,
representing 71% of net assets. Over the short term the Managers expect this
exposure to increase to approximately 75% of net assets over the coming weeks.



The Company's secured loan investments have been acquired at an average price of
96 pence per £1 nominal and at an average floating spread to three month Libor
of 250 basis points. The current running yield on the secured loans portfolio is
approximately 8.75%.



High yield and investment grade corporate bonds

The Company has investments in aggregate of £7.8 million and £2.1 million in
high yield corporate bonds and investment grade corporate bonds respectively.



The Managers have invested across a broad range of industry sectors at
attractive prices and yields. Investments in high yield corporate bonds are
focused on non-cyclical industrials such as mobile telecommunications and
European cable companies. The investment grade corporate bonds are concentrated
in the UK and European financial and insurance sectors.



The average yield on acquisition cost is approximately 8.75% for the high yield
corporate bond portfolio and 7.5% for the investment grade portfolio.


Outlook

The Managers believe that the Company is well positioned to offer both a high
level of income to Shareholders and good prospects for capital growth from its
investments in secured loans and corporate bonds.

The Board remains committed to the Company's primary investment objective of
delivering an income return to Shareholders of at least three month Libor plus
1.25%.

                                    - ENDS -


Jenna Barnard

Associate Director, Fixed Income

Tel: [phone]



John Pattullo

Director of Fixed Income

Tel: [phone]


Peter Ames

Associate Director, Investment Companies

Tel: [phone]


                      This information is provided by RNS
            The company news service from the London Stock Exchange