Henderson Far East Income - A fully covered 10% dividend yield.

Henderson Far East Income (HFEL) is managed by Mike Kerley and Sat Duhra, who are genuine income investors. This is evidenced by the trust’s very attractive double-digit dividend yield, which is well above its peer group, and is a ‘natural’ distribution as it is fully paid out of income. HFEL’s managers have been increasing the trust’s allocation to Chinese-listed companies in anticipation of a post-COVID economic recovery in the country; China now makes up around a quarter of the fund. Meanwhil

Henderson Far East Income - Cautious of continued volatility but value on offer

In our last review of Henderson Far East Income (HFEL) 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 drive

Henderson Far East Income - Attractive yield despite modest dividend increase

Henderson Far East Income’s (HFEL) board recently announced that the quarterly dividend has been increased from 5.9p to 6p per share, broadly in line with the last increase. While the increase is modest, it is in the context that the board seeks sustainability in distributions and that HFEL is yielding 8.6%, a substantial premium to peers and the index. Despite the latest modest increase, since launch in 2006 to the end of December 2021 HFEL’s dividend has grown at an annual compound rate of 5.8

Henderson Far East Income - A strong recovery in dividend income for H122

Henderson Far East Income (HFEL) focuses on providing investors with a high and growing level of income, with capital appreciation an important consideration within the investment objective. The trust has met these goals on a total return basis, with a dividend yield premium of around 50% over its Association of Investment Companies (AIC) peers. This is funded predominantly via underlying dividend income, which increased by 14.7% in H122 (31 August 2021 to 28 February 2022) versus H121.

Henderson Far East Income - Compelling income and recovery potential

Henderson Far East Income (HFEL) is differentiated from its Asian income peers by its high dividend yield (c 8% versus a peer average of c 4%), fully covered by income in each of the last 10 years except FY21 (99% covered). During the COVID-19 period, HFEL’s capital performance has come under pressure as investors have eschewed the sort of cash-generative companies with high or growing dividends favoured by manager Mike Kerley, preferring the allure of companies promising future growth. However,

Henderson Far East Income - Consistently high and growing income

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 r

Henderson Far East Income - Keeping the faith and covering the dividend

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 t

Gimme shelter

The coronavirus pandemic has caused dividends to be cancelled or cut across the world, but the impact has yet to be fully felt – with more bad news likely to come in the second half of the year. Pressure has come through reduced revenues, due to a slowdown in economic activity and a regulatory interference in dividends being paid by industries which have received taxpayer support. The task for income investors is to identify the regions and sectors which are expected to be less affected; to whic

Henderson Far East Income - Access to Asian growth with solid 6% yield

Henderson Far East Income (HFEL) performed strongly in 2019, unusually outperforming a rising market while continuing to achieve a well-covered dividend and a yield in excess of 6%. The trust, managed by Mike Kerley and Sat Duhra at Janus Henderson Investors, has a relatively concentrated (c 50 stock) portfolio that is split roughly equally between high-yielding stocks and those offering superior dividend growth prospects. Drivers of positive performance during the year included stocks from both

Henderson Far East Income - Finding high yields and dividend growth in Asia

Henderson Far East Income (HFEL) continues to reward its investors with a c 6% dividend yield, fully covered by revenues and growing year-on-year (4.9% CAGR over five years), as well as capital growth (total returns of c 8–14% a year over three, five and 10 years). Manager Mike Kerley notes that payout ratios across the Asia-Pacific region are increasing, supported by the strong cash position of many companies, although at an index level it is hard to observe the improvement, because of the huge

Henderson Far East Income - Overview

Henderson Far East Income (HFEL) aims to generate a rising dividend stream from equities in Asia, including Australasia but excluding Japan. The trust currently yields 6.3%, significantly higher than all of its closed-ended rivals and higher than all but one open-ended equivalent trust. Using the ability of closed-ended trusts to hold back income in reserves, which open-ended funds don’t share, the trust has managed to increase its dividend in each of the past ten years. At the same time, it ha

Best in class

Today, we introduce our investment trust ratings. According to the quantitative screens we have selected in an attempt to highlight the best performers in the closed-ended universe, the trusts discussed here have been the best in their classes over the last five years. We have selected trusts using two different sets of criteria, aiming to identify the top performers for capital growth and for achieving a high and growing income. There are many rating systems for open-ended funds, but no quantit

LIBERUM: Plus500: Strategic progress pays dividends

Tatton Asset Management (TAM LN) - Record net inflows

Tatton, the leading on-platform discretionary fund manager (DFM) and IFA support services Group has released a trading update ahead of its results to 31 March 2024, due on 18 June 2024.

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

Ondo InsurTech FY24 Trading Update

Ondo InsurTech has released a brief post-YE update revealing its good progress continued through 2H24 and consequently FY24 will be in line with market expectations.

Foxtons Group (FOXT LN) - 1Q24 IMS shows real momentum

Foxtons Group plc first quarter revenue rose 9% to £35.7m (1Q23: £32.9m) with growth delivered across all business segments. Trading is in line with management's expectations.

BlackRock World Mining

BRWM’s managers: we see all the classic signs of high commodity prices...

Morning Note – 18 April 2024

NextEnergy Solar Fund - Attractive Refinancing

The refinancing of a £135m revolving credit facility and the extension of a similar £70m facility gives NESF firepower as development opportunities for new solar are especially attractive thanks to lower module prices in Europe. They give the fund key financial flexibility at a critical time as it pursues its capital recycling programme.

Foxtons Group - FY24 underpinned by market share gains

Foxtons Group’s Q1 revenue grew by 9%, supported by growth in all three divisions as the strategic initiatives continue to gain significant momentum, driven by investment in staff, best-in-class bespoke IT and data platforms. This implies that Foxtons’ medium-term targets are now coming into focus. Market share is being gained in all divisions, which puts Foxtons in a good position as the sales market stabilises. We maintain our valuation of 132p/share and believe that if interest rates stabilis

NextEnergy Solar Fund – High- and growing-income opportunity?

NextEnergy Solar Fund (NESF) is almost 10 years old. Since launch, it has built a £1.2bn, 933MW portfolio of 100 operating solar assets, powering the equivalent of over 330,000 homes, declared dividends totalling £333m, and avoided the emission of about 2.2 Mt CO2e. NESF is on track to pay 8.35p in dividends, with forecast dividend cover of about 1.3x. Share price weakness that has afflicted the whole sector means that dividend translates to a yield of 11.1%, one of the highest in its sector, a

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol

Initial Equity Trading Comments - 19 February 2024

M Winkworth+ (WINK, House Stock at 163p) - Solid FY23A results, well placed to grow

Hybridan Research: Sector Review: Artificial intelligence in UK cybersecurity: the human uplift 17/04/2024

Artificial intelligence (AI) is a double-edged sword in cybersecurity. Whilst new AI models, architectures, and innovations are emerging to protect the security posture of organisations, attackers are also benefiting from deepfakes, sophisticated phishing, and automation of malicious codes. To ensure the impact of AI on cybersecurity to be a net-positive, we need to pit good AI against bad AI. Point solutions enhanced with machine learning: Global cybersecurity has been built with point soluti

Resilient FY24, confident long-term outlook

Vp’s full year update highlights sector-leading results, once again benefiting from the diversity of its end markets and the quality of its specialist businesses. With results expected to be broadly in line with expectations, we trim our FY24 PBT forecast by c.5% to £39.0m, a shade below the FY23 outturn (£40.2m). We consider this an impressively resilient performance set against a mixed market backdrop. Under new leadership, a strategic refresh is underway and management is confident in long