London, UK, 19 July 2023
Edison issues update on Henderson Far East Income (HFEL)
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. Meanwhile, they have retained an underweight position in Taiwanese and technology stocks, given the limited yields and more demanding valuations.
The managers' focus on companies that can generate sustainable growth in cash flow and dividends, along with the fund's below-market technology exposure, means that HFEL should be relatively defensively positioned during periods of market weakness, although performance could lag during a strong growth-led bull market. Investors appreciate HFEL's high dividend yield, which is evidenced by its shares having regularly traded at a premium to NAV since 2007, and it is the highest-rated fund in its peer group (the only one trading at a premium).
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