HFEL : Henderson Far East Income fails to match benchmark
Henderson Far East Income, managed by Michael Kerley (pictured), has reported a total return of 11.2% on net assets for the year that ended on 31 August 2014, underperformance of its peer group, which returned 12.1%, and its benchmark (the FTSE All World Asia ex Japan Index), which returned 13.3%. The dividend for the year was increased to 18.2p from 17.0p. The shares moved from trading at a discount of 1.0% to a premium of 0.9% to help generate a return to shareholders of 13.5%.
The manager’s report says that (relative to the benchmark) at the country level the portfolio benefited from being underweight in Korea and being overweight in Taiwan while underweight positions in India were detrimental. The strong performance of the technology sector and in particular the internet names, to which they have little or no exposure, also hurt relative performance although the better than market returns of the telecom sector was a positive.
At the stock level the portfolio benefited from the strong performance of Catcher Technology, Grand Korea Leisure, Hyundai Motor, Spark New Zealand and Petrochina which all rose by more than 30% over the period. On the negative side, holdings of Guangzhou R&F Properties, Mizuho Financial, Myer Holdings and Advanced Info Services all fell by more than the market. Not holding Tencent, also hurt their relative performance.