Edison issues review on Henderson Far East Income

RNS Number : 3281G

Henderson Far East Income Limited

23 July 2021

 

  London, UK, 23 July  2021

Edison issues review on Henderson Far East Income (HFEL)

Henderson Far East Income (HFEL) continues to reward its investors with a high, rising and fully covered income from a relatively concentrated (c 45 holdings) portfolio of stocks from across the Asia Pacific region. Managers Mike Kerley and Sat Duhra see good opportunities in banks and materials stocks, both of which are set to benefit from the expected economic recovery as the region and the wider world look ahead to life after the pandemic stage of COVID-19. Although recent returns have been relatively muted (given large gains in areas such as Australian banks, which the managers felt were unattractive from an income perspective), Kerley sees strong earnings growth expectations for the region as eminently achievable, which should support further dividend growth.

HFEL is a fund that 'does what it says on the tin', offering investors a high and growing yield from a portfolio of companies across the Asia Pacific region. As shown in the chart above, its dividends (always fully covered to date, even in FY20) have provided a consistent return, which has only been negated by capital losses in two of the past 10 years, leading to an average annual total return of c 7% over the decade to 30 June 2021. With a yield of 7.2%, the trust only needs to stand still in capital terms to keep up this average; however, its focus on less COVID-affected North Asian markets and the prospect of a continued shift in market focus towards more economically sensitive and higher-yielding stocks holds out the prospect of a superior total return. HFEL's shares consistently trade at a small premium to NAV, suggesting it has a loyal following.

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