Henderson Diversified Income has published results for the year that ended on 31 October 2014. The net asset value rose from 87.92p to 88.82p over the year but the share price slipped a little – from 91.5p to 91.25p – still a healthy premium to the asset value. The premium allowed the fund to issue a large number of new shares (assets grew by 54% year on year) and, as the fund expanded, the ongoing charge ratio reduced from 1.4% to 1.08%.
The dividend for the year edged up from 5.05p to 5.1p.
There has been a small change to the performance fee – with effect from 1 November 2014, the performance benchmark will be the total return of three month sterling Libor plus 2.00%, increased from three month sterling Libor plus 1.25%.
The managers’ report says the portfolio experienced no defaults in the period, whilst the European loan market experienced annualised defaults to the end of October 2014 of 5.3%, although a significant component of this was Vivarte, a large French retailer. In the three months to end October 2014, the European loan market returned 0.25%, approximately 1% below its running yield (in other words the capital value of these loans fell), but almost 0.5% more than the European high yield market. The managers say this is what they should expect to see from loans given their higher level of seniority and security compared with the average high yield bond during periods of financial market risk aversion. Performance from the European loan market was below their expectations for the period, with the market delivering a return of 3.5%. Returns were compressed largely by strong re-pricing and re-financing activity through the middle part of the year and recent risk asset market volatility.
HDIV : Henderson Diversified Income 50% bigger than it was last year