Henderson Far East Income (HFEL), the highest-yielding trust in the Asia Pacific Equity Income sector, has reported a strong first half to its financial year with a 23.3% underlying return in the six months to 28 February driven by technology, materials and energy stocks. However, it lagged the 26.2% gain in the MSCI AC Asia Pacific ex Japan while shareholders saw a 22.9% total return.
Sat Duhra, manager of the 9.6%-yielder, was confident the region would not suffer long-term damage from the economic shock of the conflict in the Middle East, saying its markets had demonstrated resilience in the past and possessed broad growth trends in technology, financials, infrastructure, consumer spending and corporate reform.
“Asia has a unique position as a hub for technology supply chains; banks are bringing millions of consumers into the banking system accelerated by a digital rollout and infrastructure is benefitting from significant power demand boosted by AI,” he said.
“These trends, in combination with faster than expected dividend growth offer a compelling and unique exposure for investors,” he added.
Our view
Matthew Read, senior analyst at QuotedData, said: “Henderson Far East Income has delivered decent absolute returns and, while it lagged its benchmark over the period, this is largely a function of its style rather than stock-picking missteps. The MSCI AC Asia Pacific ex Japan index was driven heavily by a narrow group of large technology names – notably TSMC, Samsung Electronics and SK Hynix – that moved higher driven by enthusiasm around AI and semiconductor demand. With a portfolio focused more around income generation and value, HFEL was unlikely to fully keep pace with this rally.”
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