James Carthew: HINT chases growth just as value breaks through
Henderson International Income (HINT) is supplementing dividends with payments out of capital to allow it to hold more low-yielding technology stocks. Is the move mistimed?
Henderson International Income (HINT) has announced that following a spate of poor performance it intends to follow peers such as JPMorgan Global Growth and Income (JGGI) and Invesco Global Equity Income Trust (IGET) down the route of supplementing its dividend with payments out of capital.
At its annual general meeting next month it will ask shareholders for approval to turn its share premium account into a distributable reserve. However, ahead of this, for the financial year that ended on 31 August, it is paying a dividend of 7.71p per share from earnings of 6.72p, taking £1.94m off its brought-forward revenue reserves of £5.33m.
Within the AIC Global Equity Income sector, excluding highly geared minnow British & American (BAF), Henderson International is the worst-performing of six trusts over five years with a total shareholder return of 26.8%. Over three and ten years it ranks above only Scottish American (SAIN) and Murray International (MYI) respectively.
The underperformance to JPMorgan Global and Invesco Global is significant, amounting to about 80 percentage points behind JGGI and 46 percentage points behind IGET over five years.
That is reflected in… read more here