£482.8m market cap
331p last close
Henderson Far East Income aims to provide shareholders with a growing total annual dividend per share, as well as capital appreciation, from a diversified portfolio of investments in the Asia-Pacific region. The fund is classified by the AIC in the Asia Pacific – Income sector and, while it does not have a benchmark, sees the Asia Pacific ex-Japan index and the MSCI Asia Pacific ex-Japan High Dividend Yield index as appropriate performance comparators.
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 to reserves to help underpin future dividend growth. Managers Mike Kerley and Sat Duhra remain convinced that market focus will return to value and yield factors, as seen in the quantitative easing era of 2011–13, given the ‘even lower for even longer’ interest rate outlook.