Alternative to Henderson Far East Income Ltd (HFEL)?

[richfool]

Perhaps I am being a bit dim or not simply looking hard enough, but does anyone know if there is a funds version of Henderson Far East Income Ltd (HFEL)? I won't buy an IT on a premium. Thanks.

RVF there are alternative IT's in the Asian Pacific Income sector.

https://citywire.co.uk/funds_insider/in ... ePeriod=12

I would suggest taking a look at JP Morgan Asian Income trust (JAI), as it like HFEL has a higher exposure to China.
https://www.hl.co.uk/shares/shares-sear ... nt-ord-25p

Other trusts within that sector on a discount include AAIF though this one has a lower exposure to China:
https://www.hl.co.uk/shares/shares-sear ... npv-shares

[Dod101]

Perhaps I am being a bit dim or not simply looking hard enough, but does anyone know if there is a funds version of Henderson Far East Income Ltd (HFEL)? I won't buy an IT on a premium. Thanks.

I do not think you are being dim because it is not usually a very good idea to buy an Investment trust at much over NAV. However, I am not sure that you should equate an IT with an open ended fund like an OEIC. They are very different animals and in fact I would not be keen on buying the equivalent portfolio as an OEIC. The differences/advantages have been discussed many times on this Board and of course the liquidity issue (as with the Woodford funds) is but a small part of the difference.

Maybe just wait until the premium drops a bit? Or of course you have been given various alternative funds to look at.

Dod

[monabri]

HFEL are at a 1.66% premium to NAV...not that much of a premium. There have been opportunities to buy at ~ no premium but you'd have to be watchful - see chart below from HL (link below as well)

https://www.hl.co.uk/shares/shares-sear ... td-ord-npv

[Dod101]

HFEL are at a 1.66% premium to NAV...not that much of a premium.

https://www.hl.co.uk/shares/shares-sear ... td-ord-npv

I thought it was more than that monabri and would certainly not hesitate to buy if I were in the market like the OP.

Dod

[monabri]

(The HL date was 22 October so a little out of date).

From the London Stock Exchange, we have

https://www.londonstockexchange.com/exc ... 79568.html

"As at close of business on 23rd October 2019, the unaudited net asset value per share, calculated in accordance with the AIC formula (including current financial year revenue items) was 353.4p.

As at close of business on 23rd October 2019, the unaudited net asset value per share (excluding current financial year revenue items) was 345.5p".

The graph (previous) suggests that HFEL is trading that the current premium/discount is not atypical of recent times.

I'm basing the calculation on the 353.4p and a closing price of 361.0p suggesting a premium of 2.15%..a little higher than the HL value.

[richfool]

Perhaps I am being a bit dim or not simply looking hard enough, but does anyone know if there is a funds version of Henderson Far East Income Ltd (HFEL)? I won't buy an IT on a premium. Thanks.

RVF there are alternative IT's in the Asian Pacific Income sector.

https://citywire.co.uk/funds_insider/in ... ePeriod=12

I would suggest taking a look at JP Morgan Asian Income trust (JAI), as it like HFEL has a higher exposure to China.
https://www.hl.co.uk/shares/shares-sear ... nt-ord-25p

Other trusts within that sector on a discount include AAIF though this one has a lower exposure to China:
https://www.hl.co.uk/shares/shares-sear ... npv-shares

RVF, Sorry (in my earlier post) I omitted to say that JAI and AAIF are at discounts. JAI at 6.74% discount and AAIF at 9.00% discount.

[mc2fool]

Perhaps I am being a bit dim or not simply looking hard enough, but does anyone know if there is a funds version of Henderson Far East Income Ltd (HFEL)? I won't buy an IT on a premium. Thanks.

Edited - Just after I posted, I found this, Janus Henderson Horizon Asian Dividend Income Fund. I may have answered my own question. Thanks.

Actually it's Janus Henderson Asian Dividend Income Unit Trust, although I do struggle to see the difference!

Some years back I was interested in buying HFEL but it was on a premium, and as it happened around that time the Investors Chronicle published an article on ITs vs OEICs which included a table of ITs and "equivalent" OEICs, and they listed Henderson Asian Dividend Income UT as the equivalent to HFEL.

https://www.investorschronicle.co.uk/2013/05/13/funds-and-etfs/the-big-theme/why-investment-trusts-beat-open-ended-funds-4afi5mq7ZucZliBbTdvE8I/article.html (free registration required).

I bought the UT although swapped it to HFEL a few years later in a bed'n'ISA operation at a time when HFEL's premium fell to zero.

[Dod101]

This is always an interesting discussion (about buying at a premium or at a discount) Although I would prefer not to buy at a premium I do not always follow my own advice. Furthermore, buying at a discount is not always a good idea either because often the discount is there for a good reason and I find that it is always worthwhile trying to discover why. So like most investment matters things are never black or white.

I would always buy the investment trust version of a fund if there is a choice though. That is to me fairly black or white.

In summary if HFEL is standing at a premium of not more than say 2.5% I would probably buy. I already hold a fair slug of it so the matter is academic for me at the moment.

Dod

[Itsallaguess]

This is always an interesting discussion (about buying at a premium or at a discount)

Although I would prefer not to buy at a premium I do not always follow my own advice.

I've bought a few IT's at slight premiums, and it's almost guaranteed that I will do so again.

The way I see it is that if it's a particular Investment Trust that I want to be invested in, and I don't currently have any alternative plans for the capital, then I consider 'holding that capital as cash' to be a 'premium' position too, given it's 'current exposure' to inflation and the high likelihood that the capital would sit as cash until it was actually invested.

Given the above, and so long as the current premium is not too high, then I often just decide that life is too short, and invest in the IT.

In a couple of years, and so long as we keep to relatively low premiums where they do apply, then it's all likely to be noise anyway....

Cheers,

Itsallaguess

[77ss]

(The HL date was 22 October so a little out of date).

From the London Stock Exchange, we have

https://www.londonstockexchange.com/exc ... 79568.html

"As at close of business on 23rd October 2019, the unaudited net asset value per share, calculated in accordance with the AIC formula (including current financial year revenue items) was 353.4p.

As at close of business on 23rd October 2019, the unaudited net asset value per share (excluding current financial year revenue items) was 345.5p".

The graph (previous) suggests that HFEL is trading that the current premium/discount is not atypical of recent times.

I'm basing the calculation on the 353.4p and a closing price of 361.0p suggesting a premium of 2.15%..a little higher than the HL value.

One can short-circuit all this by just using the AIC figure - 'data as at: 23/10/2019'. Currently at 2.2%.

Personally, I think this degree of premium is irrelevant, given all the other variables.

[scotia]

Since the Janus Henderson Asian Dividend Unit Trust has no premium/discount problems, and since its 5 year total return performance is slightly better than HFEL (54.7% to 52.32%) it seems to me that a switch from HFEL is currently a no-brainer! Both have dividends around the 6% mark
But if a somewhat lower ( around 4% ) dividend is acceptable, JP Morgan Asian Investment Trust (JAI) has a much higher 5 year total return (94.5%)
And if a considerably lower income is acceptable, Fidelity Asia Pacific Opportunities has a 5 year total return of 113.6%.
Lots of choices - but I admit the 6% dividend of the Henderson investments, combined with a reasonable 5 year total return is hard to beat.
(all figures from HL - which I have hopefully transposed accurately)

[richfool]

I do note that whilst HFEL pays the highest dividend yield in the sector, it is however towards the lower end of the capital performance tables:

https://citywire.co.uk/wealth_manager/i ... ePeriod=12