London, UK, 20 June 2022
Edison issues update on Henderson International Income Trust (HINT)
Henderson International Income Trust has succeeded in achieving its dual objectives of capital gains and a high and growing dividend. It has delivered an average annualised total return of 11.3% on an NAV basis over the 10 years to end May 2022, although its focus on income diversification and value means that performance has lagged the index return of 11.6% over this period. At the same time, dividend payments have increased at an average, inflation-beating rate of 5% per annum since inception. An enhanced dividend policy, announced in October 2021, is expected to see the annual dividend increase by at least 14.3% for the current financial year to end August 2022. This represents a prospective yield of 4.1%.
HINT's focus on generating a high and growing dividend from a globally diversified portfolio, combined with its enhanced dividend pay-out policy, may appeal to investors seeking rising income in the current low interest rate, high inflation environment. The board's commitment to use reserves to maintain dividend payments, if necessary, should reassure such investors about the reliability of this income. HINT's yield is attractive compared to the returns offered by other asset classes. Its strong performance in absolute terms and persistent outperformance of UK markets may attract investors seeking capital gains and income diversification beyond the UK, although its focus on diversification and value means returns have lagged the benchmark. The trust's discount to NAV, while on a narrowing trend, is still relatively wide compared to historical levels close to par, and to that of its peers, and may therefore offer investors an attractive entry point. There is scope for the ongoing charge to decline once the new, lower management fee structure takes effect in September 2022. HINT's strong positive absolute returns over the long-term attest to the manager's capacity to weather uncertainty and capitalise on the resultant investment opportunities, regardless of the near-term investment climate.
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