Henderson International Income Trust (LSE: HINT)

Last close As at 15/06/2024

GBP1.66

0.00 (0.00%)

Market capitalisation

GBP325m

Henderson International Income Trust (HINT) seeks to provide shareholders with a growing total annual dividend, as well as capital appreciation, by investing in a focused and internationally diversified portfolio of c 70 stocks that are either listed in, or whose principal business is in, countries outside the UK. The portfolio is diversified by geography, industry and investment size. In April 2022, HINT adopted the MSCI ACWI (ex UK) High Dividend Yield Index as its new benchmark.

Equity Proposition

Henderson International Income Trust (HINT) is managed by Ben Lofthouse at Janus Henderson Investors (JHI), a global asset manager based in London. The trust aims to provide shareholders with a growing total annual dividend, as well as capital appreciation, and has met both these objectives over the long term.

  1. HINT aims to provide a growing income.

HINT pays a generous, predictable and growing dividend, funded by income that is diversified by region and sector. Its dividend has increased every year since inception in 2011 and it recently joined the ranks of the AIC’s next generation of dividend heroes, which recognises the delivery of 10 or more consecutive years of dividend growth. In 2021, the trust adopted a more generous dividend policy that has increased the size of the annual dividend payment. As a result, HINT’s dividend yield ranks among the highest in its AIC Global Equity Income peer group.

Furthermore, HINT’s board remains committed to supporting future dividend growth. The trust can use the investment company structure to build up revenue and capital reserves in good years to support dividend payments in more difficult times if needed. This provides smoother returns over the long term. HINT’s reserves are more than sufficient for this task. At end-FY23, distributable reserves stood at £107m, representing more than six times dividend cover.

  1. HINT looks beyond the UK.

The trust is intended to provide UK investors with a globally diversified equities portfolio that complements their exposure to the domestic market. For this reason, HINT does not invest in UK stocks. It focuses instead on identifying companies in the Americas, Asia-Pacific and Europe (ex UK) that are best placed to meet HINT’s objectives of delivering income and growth to investors. None of these regions represents more than 50% by value of assets, which ensures the portfolio is always well-diversified on a regional basis.

Investment ideas are provided by JHI’s global team of over 340 sectoral, regional and thematic experts, located around the world, including in Denver and Singapore.

  1. HINT targets strong, attractively valued companies, including those exposed to structural themes.

The team targets leading companies that have strong, competitive positions, good cash flow generation, sustainable business models and effective, growth-oriented managers. Target companies must also be capable of consistently delivering profits throughout the market cycle, with the potential to combine high and growing dividends with capital growth potential. This includes businesses exposed to structural trends, such as the reshoring of supply chains, decarbonisation and the rapid spread of technology. These are themes that the manager expects will drive earnings and dividends over the medium to longer term.

The manager has a bias towards attractively valued businesses where the market appears to have misunderstood or overlooked long-term opportunities due to short-term concerns. He expects such companies to outperform as the market comes to fully appreciate their merits.

  1. HINT has a track record of strong outright long-term gains and outperformance of the UK market.

HINT has realised its capital growth objective, making an average annualised return of 9.0% over the 10 years ended March 2024. The trust has also outperformed the UK market over this period – a reminder to UK investors of the merits of diversification away from their home market.

Latest Insights

View More

Equity Analyst

Joanne Collins

Joanne Collins

Analyst, Investment Trusts

Key Management

  • Ben Lofthouse

    Fund manager

  • Dan Howe

    Head of investment trusts, Janus Henderson

  • Simon Jeffreys

    Chairman

Share Price Performance

Price Performance
% 1M 3M 12M
Actual (2.1) 3.4 (4.3)
Relative 0.2 (2.3) (11.6)
52 week high/low 174.0p/148.5p

Overview

Henderson International Income Trust (HINT) is meeting its long-term objectives to provide both rising income and capital appreciation. It adopted a more generous dividend policy in 2021 and its 4.7% dividend yield is the highest among its peers. HINT has also delivered average annualised gains of 8.4% in NAV terms over the 10 years ended December 2023. However, the manager’s cautious, balanced stance, which favours value and defensive names and underweights the US, has underperformed recently due to the AI-driven rally in a handful of tech stocks and the improvement in the United States’ economic outlook, which has benefited cyclical names. However, HINT’s manager is using what he believes to be unjustifiably low valuations to add good companies with the capacity to grow dividends, at attractive prices. This includes businesses exposed to structural trends such as decarbonisation and the rapid spread of technology. He expects such acquisitions to outperform as the market comes to fully appreciate their merits.

Thematics

thematic

Investment Companies

Emerging markets – Worthy of consideration

thematic

Investment Companies

Dynam Capital at the 2024 Vietnam ESG Conference

thematic

Investment Companies

UK stock market – Scope for further upside in UK large-cap stocks

thematic

Investment Companies

Listed private equity – Performing a balancing act

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free