Henderson Far East Income: Half-year results 2023
Portfolio Manager, Mike Kerley discusses the half-year results for Henderson Far East Income, including the key drivers of performance, the implications of China’s reopening, US-China tensions, and the outlook for Asian dividends.
26 Apr 2023
9 minute watch
9 minute watch
Key takeaways:
- The Company’s NAV total return was down 4.0%, outperforming its regional index (FTSE All-World Asia Pacific ex Japan Index) but lagging behind the MSCI AC Asia Pacific ex Japan High Yield Dividend Index. The first and second interim dividends have been declared at 6.00p per ordinary share – a 1.7% increase compared to last year.
- Financials stocks in Korea, Hong Kong/China, and Australian resource stocks (BHP and Rio Tinto) added to performance. However, Australian energy stocks (Santos and Woodside), Chinese consumer names, and telecommunication stocks in Indonesia and Korea detracted.
- The outlook for dividends in the Asia Pacific region remains robust. Though the windfall from higher oil, gas and materials prices will not be as abundant this year as it was last year, it will be supplemented by a greater contribution from sectors that were under pressure in 2022.
Related insights
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.
Before investing in an investment trust referred to in this document, you should satisfy yourself as to its suitability and the risks involved, you may wish to consult a financial adviser. This is a marketing communication. Please refer to the AIFMD Disclosure document and Annual Report of the AIF before making any final investment decisions. Henderson Far East Income Limited is a Jersey fund, registered at Liberté, 19-23 La Motte Street, St Helier, Jersey JE2 4SY and is regulated by the Jersey Financial Services Commission] Ref: 34V
- The Company has significant 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.
- If a Company's portfolio is concentrated towards a particular country or geographical region, the investment carries greater risk than a portfolio that is diversified across more countries.
- The portfolio allows the manager to use options for efficient portfolio management. Options can be volatile and may result in a capital loss.
- 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.
- 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
26 Apr 2023
9 minute watch
9 minute watch
Key takeaways:
- The Company’s NAV total return was down 4.0%, outperforming its regional index (FTSE All-World Asia Pacific ex Japan Index) but lagging behind the MSCI AC Asia Pacific ex Japan High Yield Dividend Index. The first and second interim dividends have been declared at 6.00p per ordinary share – a 1.7% increase compared to last year.
- Financials stocks in Korea, Hong Kong/China, and Australian resource stocks (BHP and Rio Tinto) added to performance. However, Australian energy stocks (Santos and Woodside), Chinese consumer names, and telecommunication stocks in Indonesia and Korea detracted.
- The outlook for dividends in the Asia Pacific region remains robust. Though the windfall from higher oil, gas and materials prices will not be as abundant this year as it was last year, it will be supplemented by a greater contribution from sectors that were under pressure in 2022.