Henderson Far East Income Limited Analysis

Overview

Objective

The Company seeks to provide shareholders with a growing total annual dividend per share, as well as capital appreciation, from a diversified portfolio of investments from the Asia Pacific region.

Highlights

A portfolio of value orientated Asia Pacific equities with a focus on cash flow generation from companies with the ability to sustain and grow dividends.

Performance

The following information was extracted from Henderson Far East Income Limited's half year results, released 29 April 2024:

Performance:

I am pleased to be able to report that the NAV total return for the six months to 29 February 2024 was 8.2%, ahead of the FTSE World Asia Pacific ex Japan Index which returned 5.1% and only slightly behind the MSCI AC Asia Pacific ex Japan High Dividend Yield Index which returned 10.0%. This follows the rebalancing of the portfolio in the latter part of the 2023 calendar year which was addressed in both my statement in the annual report, and the update from the Fund Manager.

The NAV total return was 8.2% in sterling terms over the period, ahead of our peers and ahead of the FTSE World Asia Pacific ex Japan Index which returned 5.1%. However, performance was behind the more concentrated MSCI AC Asia Pacific ex Japan High Dividend Yield Index which returned 10.0%. We are seeing some early evidence that the repositioning of the portfolio towards the key structural growth drivers in our region is having a positive impact on performance.

The Company’s performance greatly benefitted from our Indian holdings with Bharat Petroleum, Power Grid, NTPC, ONGC and HCL Technologies all appearing in our list of top contributors. The other positive area was technology with the likes of TSMC, Mediatek and Samsung Electronics key contributors. Our other recent holdings of Kia Corp and Wesfarmers, an Australian conglomerate, were also in the top ten contributors. Performance was negatively impacted by our China holdings with JD.com, Guangdong Investment and Li Ning remaining weak as Chinese economic data continued to falter.