Henderson Intl. Income Trust PLC Edison issues review on Henderson International IT
December 02 2022 - 5:31AM
RNS Non-Regulatory
TIDMHINT
Henderson Intl. Income Trust PLC
02 December 2022
London, UK, 2 December 2022
Edison issues review on Henderson International Income Trust
Henderson International Income Trust (HINT) has succeeded in
achieving its dual objectives of capital gains and a high and
growing dividend. Annualised NAV total return (TR) of 9.4% over the
10 years to end November 2022 is complemented by an average,
inflation-beating rate of 5% per year since inception, representing
a 4.2% dividend yield. HINT's focus on income and geographic
diversification (see Edison's January 2022 report for details) and
value means that performance has lagged the benchmark 10-year
annualised TR of 10.9%. The market weakness of the past 12 months
allowed the manager, Ben Lofthouse, to invest in what he perceives
as well managed, resilient businesses at more attractive valuation
levels. He is hopeful that these prudent investments will result in
strong capital growth and healthy dividends, supporting HINT's
solid TR.
HINT's focus on generating a high and growing dividend from a
globally diversified portfolio ex-UK, combined with its enhanced
dividend pay-out policy, may appeal to investors seeking
diversification beyond the UK and rising income in the current high
inflation environment. Within the enhanced dividend policy,
announced in October 2021, the dividend for FY22 (the financial
year ending in August) grew 15% y-o-y (preceded by 5% growth in
FY21) and was fully covered by revenue income for the accounting
period. The board's commitment to use reserves to maintain dividend
payments, if necessary, should provide investors with confidence
about future distributions. Although HINT's focus on value and
diversification (including a structural underweight in the United
States) means returns have lagged the benchmark, the absolute
long-term performance is very robust. Over the past 12 months, the
increased exposure to Asia and the consumer discretionary sector
(subsequently reduced) detracted from returns. The trust's 6.8%
discount to NAV, wider than historical levels (c 2.5% five-year
discount) and the peer average, may offer investors an attractive
entry point. There is scope for the ongoing charge to decline after
the new, lower management fee structure took effect in September
2022.
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