The lowdown on Henderson Diversified Income Trust
Sunday September 06 2020, 12.01am, The Sunday Times, Mark Atherton
What it is
A £167.4 million trust that invests in bonds — IOUs issued by governments and companies. The trust’s yield is 4.9 per cent and the annual fee is 0.9 per cent.
What it invests in
Almost 60 per cent of the portfolio is in high yield bonds, which are fairly risky. This is balanced by holding more than 30 per cent in less risky, lower yielding bonds. Among its biggest holdings are bonds issued by Crown Castle, which builds comms infrastructure such as mobile phone masts in the US; Phoenix Group, a UK insurance giant; and Virgin Media, the telecoms company.
Over one year the trust has lost 4.1 per cent, far less than the loss of 16.9 per cent for the sector as a whole. It has returned 25.1 per cent over five years, smashing the sector average of 1.6 per cent.
What the managers say
John Pattullo and Jenna Barnard said: “We seek to lend to companies with a relatively low risk of defaulting on their debt repayments, but to combine that with the best income opportunities.”
What the experts say
Marten & Co, an investment research boutique, said: “The trust is managed in a style that favours businesses with sustainable cash flows. This means that it has avoided some of the sectors worst affected by the Covid-19 pandemic, such as airlines.”