Edison issues update on Henderson Far East Income

RNS Number : 5204H

Henderson Far East Income Limited

24 November 2022

 

London, UK, 24 November 2022

Edison issues update on Henderson Far East Income (HFEL)

In our last review of Henderson Far East Income in July, Attractive yield despite modest dividend increase, we drew attention to the dividend increase from what is comfortably the highest yielding fund in the AIC Asia Pacific Equity Income sector. It was pleasing to see that in the company's published full year results to the end of August, the dividends paid by the company were covered and that over £1m was added to the revenue reserves over this period. In this note we examine the drivers of performance, although it must be acknowledged that the weakness of sterling has been a tailwind for the portfolio's capital and income returns.

Overall, the managers are cognisant of the risks and are very modestly geared, but the portfolio trades on around 8x forward price to earnings and, with the market trading on c 1.1x book value, historically this has been at or near the bottom of the trading range for Asian equities over the past 30 years. The focus remains on identifying the highest quality, best value companies that can benefit from the secular growth in the region, driven by factors such as a growing affluent middle class and the transition to clean energy. Overall, the investment approach provides a high income and differentiated returns profile that would add diversification to other Asian funds or for those seeking income.

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