Thursday, 13 November 2014

Henderson FE Income Trust - Final Results

HFEL is a long standing member of my ISA income portfolio. It seeks to provide a high level of dividends, as well as capital appreciation over the long term, from a diversified portfolio. The principal areas of investment focus are Taiwan (20%), China (18%),  Australasia (17%), Singapore (9%), Hong Kong (12%) and S. Korea (7%).

Last week I posted the results of Schroder Oriental Income which operates in the same areas but with slightly differing weightings for each country.

I last posted on HFEL following the results last November. Yesterday they issued full year results to end August 2014 (link via Investegate).

Building on last years total return of 8.8%, the Company have reported a share price total return increase of 13.5% compared to the benchmark MSCI Asia Pacific index increase of 13.3%.

HFEL is the highest yielding of my 3 Asia-focussed investment trusts. Together they comprise around 9% of my investment trust portfolio. Over the year, dividends (paid quarterly) have been lifted by a very respectable 7% from 17p to 18.2p giving a yield of 5.6% at the current price of 324p. The dividend was comfortably covered by revenue income of 19.3p per share.

Dividends have risen by an average of 7.5% CAGR in each of the past 7 years. At this rate, the dividends will double every decade.

courtesy of ChartGo (click to enlarge)

Last year, Henderson agreed to take a reduction in their annual management fee from 1.0% to 0.9% of the total value of the fund's net assets - there is no performance fee. Fees and expenses for the past year were £4.0m - around 1.2% of net assets and a welcome reduction from the previous year’s 1.4%.

Although capital appreciation is a little weak compared to say Schroder Oriental, the dividend yield is much higher and is very welcome in today's low inflation/low interest rate economy. I am happy to continue holding for the longer term.

No comments:

Post a Comment