Henderson Far East Income

Investment summary

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 growth of non-yielding Chinese internet stocks. The manager holds a relatively concentrated (c 50 names) portfolio of stocks that are broadly evenly split between those with a high starting yield and those offering good dividend growth prospects, and are diversified by sector and geography.