Edison issues review on Henderson Far East Income

RNS Number : 2396X

Henderson Far East Income Limited

04 May 2016

 

London, UK, 4 May 2016

Edison issues research review on Henderson Far East Income

Henderson Far East Income (HFEL) seeks to blend the superior growth prospects of investing in Asia with a focus on generating a high income. With a current dividend yield of 6.9%, it is comfortably the highest yielding of its close peer group, and manager Michael Kerley also sees potential for double-digit dividend growth in the portfolio over the next 12 months. Capital performance has been more muted in a period of volatility as investors have focused on the risks arising from a slowdown in China, but NAV total returns in the half-year ended 29 February 2016 were positive in absolute terms and ahead of the FTSE Asia Pacific ex-Japan index benchmark. Having traded at an average premium to NAV of 0.6% since launch in 2007, the fund currently stands at a small discount.

HFEL has traded on average at a 0.6% premium to cum-income net asset value since launch in 2006, but in recent months has moved to a small discount as first Asian equities, and then income stocks have fallen from favour. The 2.5% discount at 2 May is much narrower than the five-year high of 5.9% reached on 19 February, but may still represent a potentially attractive entry point given the long-term average premium and the high yield of 6.9%. HFEL has the authority to buy back shares to manage a discount, but has not done so to date.

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