Henderson International Income Trust plc: Half-Year Results 2023
Ben Lofthouse, Portfolio Manager of Henderson International Income Trust discusses the half-year results, including the key drivers of performance, changes made to the portfolio and the key risks to watch out for. Ben also provides his outlook for global dividends in the coming months.
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Key takeaways:
- The Company’s NAV total return per ordinary share was 2.2%, outperforming the benchmark return of 0.5%. Despite the challenging backdrop, the share price total return was 6.5%. This included dividends totalling 3.7p per share – a 2.8% increase year-on-year.
- Our overweight exposure to European stocks – which represented on average a third of the portfolio – contributed the most to performance. Financial holdings also added to performance, whilst consumer discretionary names benefitted from China’s reopening.
- We continue to focus on identifying companies with robust free cash flow characteristics and strong balance sheets that we believe are well positioned to navigate the challenging global economic environment.
Balance Sheet – A financial statement that summarises a company’s assets, liabilities and shareholders’ equity at a particular point in time. Each segment gives investors an idea as to what the company owns and owes, as well as the amount invested by shareholders. It is called a balance sheet because of the accounting equation: assets = liabilities + shareholders’ equity.
Cash flow – Cash that a company generates after allowing for day-to-day running expenses and capital expenditure. It can then use the cash to make purchases, pay dividends or reduce debt.
Net asset value (NAV) – The total value of a fund’s assets less its liabilities
Discrete Performance
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These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.
Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
The information in this article does not qualify as an investment recommendation.
Marketing Communication.
Important information
Please read the following important information regarding funds related to this article.
- Higher yielding bonds are issued by companies that may have greater difficulty in repaying their financial obligations. High yield bonds are not traded as frequently as government bonds and therefore may be more difficult to trade in distressed markets.
- The portfolio allows the manager to use options for efficient portfolio management. Options can be volatile and may result in a capital loss.
- Global portfolios may include some exposure to Emerging Markets, which tend to be less stable than more established markets. These markets can be affected by local political and economic conditions as well as variances in the reliability of trading systems, buying and selling practices and financial reporting standards.
- Where the Company invests in assets that are denominated in currencies other than the base currency, the currency exchange rate movements may cause the value of investments to fall as well as rise.
- This Company is suitable to be used as one component of several within a diversified investment portfolio. Investors should consider carefully the proportion of their portfolio invested in this Company.
- Active management techniques that have worked well in normal market conditions could prove ineffective or negative for performance at other times.
- The Company could lose money if a counterparty with which it trades becomes unwilling or unable to meet its obligations to the Company.
- Shares can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
- The return on your investment is directly related to the prevailing market price of the Company's shares, which will trade at a varying discount (or premium) relative to the value of the underlying assets of the Company. As a result, losses (or gains) may be higher or lower than those of the Company's assets.
- The Company may use gearing (borrowing to invest) as part of its investment strategy. If the Company utilises its ability to gear, the profits and losses incurred by the Company can be greater than those of a Company that does not use gearing.
- If the Company seeks to minimise risks (such as exchange rate movements), the measures designed to do so may be ineffective, unavailable or negative for performance.
- All or part of the Company's management fee is taken from its capital. While this allows more income to be paid, it may also restrict capital growth or even result in capital erosion over time.
Specific risks
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Key takeaways:
- The Company’s NAV total return per ordinary share was 2.2%, outperforming the benchmark return of 0.5%. Despite the challenging backdrop, the share price total return was 6.5%. This included dividends totalling 3.7p per share – a 2.8% increase year-on-year.
- Our overweight exposure to European stocks – which represented on average a third of the portfolio – contributed the most to performance. Financial holdings also added to performance, whilst consumer discretionary names benefitted from China’s reopening.
- We continue to focus on identifying companies with robust free cash flow characteristics and strong balance sheets that we believe are well positioned to navigate the challenging global economic environment.