Edison issues review on Henderson Far East Income

RNS Number : 4948H

Henderson Far East Income Limited

03 December 2020

 

London, UK, 3 December 2020

Edison issues review on Henderson Far East Income (HFEL)

Henderson Far East Income (HFEL) has experienced a tough period of capital performance as market participants have focused ever more on growth and momentum rather than cash flows and dividends. However, in a year where the majority of investment trusts have needed to dip into reserves to avoid cutting their dividends, HFEL stands out in that it not only delivered year-on-year dividend growth of 2.7% for FY20, it fully funded its dividend from portfolio income and even made a small contribution to reserves to help underpin future dividend growth. Managers Mike Kerley and Sat Duhra remain convinced that market focus will return to value and yield factors, as seen in the quantitative easing era of 2011-13, given the 'even lower for even longer' interest rate outlook.

At 2 December 2020, HFEL's shares traded at a 2.6% premium to cum-income NAV. The trust has traded on average at a small premium over one, three, five and 10 years, and has continued to grow its dividend (current yield of 7.2%) despite a large increase in its share base through regular tap issuance to manage the premium.

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