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I wonder if the recent dip in the share price was correlated with the Chinese market sell off. I forget what holdings this actually has, some dont even mean much too me as I have a hard enough time trying to figure out my own UK holdings hence why I pay the fund manager to sort the details for me
The biggest holding, China Construction Bank is down over 10% this month. I just looked. I suppose I could set up a watch list of some of its holdings.
Anyway things creeping back up.
Stewart APAC fund has 40% invested in India ..... while the income fund looks like it has a return 0f 0.57% yield.
Seems to me you are comparing chalk with mouldy cheese,
lti - I don't think I am comparing chalk with cheese. For me that would be comparing an investment in APAC with one in, say, the US.
Both HFEL and Stewart APAC fund invest in the Asia Pacific region. Both look to provide positive returns to investors. One via a growing dividend along with capital appreciation, the other via capital appreciation along with a small annual dividend.
Both face the same currency headwinds.
One has delivered returns over 1 and 3 years of 5% and 4%, and the other 22% and 33%.
I remain an investor with HFEL but make no apologies questioning poor capital, and total, returns over recent times.
Why are you comparing chalk with cheese?
2 completely different funds with different objectives and asset bases.
One is a high yield fund and the other a growth fund.
Currency fluctuation may well have a part to play. However, it hasn't had the same negative effect on my other far east holding - Stewart Investors Asia Pacific Leaders.
Here's total returns for 1 and 3 years - 1 year HFEL 3%, Stewart APAC Leaders 22%, 3 years HFEL 3% Stewart APAC Leaders 32%
If I look at a 5 year chart there's little to choose between them up until July 2020. Since then Stewart APAC Leaders fund has far outperformed HFEL.
''The value of an investment and the income from it can fall as well as rise as a result of market and CURRENCY fluctuations''
About a year ago sterling was at about 1.23 against the dollar - currently at 1.39.
Yes, some people forget that if you are purchasing underlying overseas assets, then fluctuating exchange rates play a part when valuations are translated into sterling for a stock like HFEL.
"when £ falls FTSE100 and foreign holdings RISE."
You miss the £/$ sensitivity of this stock I suspect.
When £ rallies so do FTSE250 stocks .. when £ falls FTSE100 and foreign holdings fall.
Thereafter, HFEL has taking a dip with the Asian Market sell off these past two months I suspect.
I like the analogy of a 'dumpy' screwdriver in a tool box! Very good.
Whilst I accept that share prices fluctuate both up and down this is probably one of my worst performers over the last 18 months or so when compared to my 21 other holdings.
Everything fell in q1 2020. Most have recovered or are on the road to recovery. This isn't. Its share price is still 18% down when compared to its q1 2020 high of £3.74. It's still 10% behind where it was in July last year, right in the middle of the pandemic.
Whilst I'm not invested here for capital growth I do expect better protection for my capital than is being provided at present.
A 23% share price increase is required here just to get back to q1 2020 levels. Something I can't see on the horizon.
Well I was expecting a lower SP this morning and with the equity issue I'm quite surprised that buying pre divi was, at this moment in time, the better decision.
I also think that this is an "income" investment rather than much capital return type thing. If that's what you really want then I would sell and move to something else, with a lower divi yield. Id be happy if it stayed this price for the next 10 years providing the income increases over time. You could of course calculate the XIRR which would account for time a bit better.
I think this is a tool in a tool box, you dont always need a dumpy screwdriver but they are handy for some occasions and invaluable at times. You wouldn't want a tool kit without it. For me it was also about balance with my UK investments.
It is still proving you with income so there is much more to come even if you dont add any more of these.
I never get concerned with share prices - I simply purchase more shares in my stocks if I believe the lower valuation represents good value in the medium to longer term and maybe top slice above averages on stocks where I am quite overweight in. Lloyds bank at under 24p for instance was a great opportunity that I took full advantage of.
If people invest in the market , then it should be understood that capital values can move a lot in both directions. What matters to me are the prices at the time of my purchases and sales and not the in between.
lti - your comments are correct.
I have a current average purchase price of £3.46. I must admit the current share price trend is a concern to me.
xd tomorrow 5.9p - I would be considering another purchase if for some reason the share price drops into the 200's in the coming days. I am not concerned about which direction the share price takes in the coming weeks and months.
'' I have continually added since. ''
So X amount of money (total invested) has not been invested since May 2017.
If I invested £2,000 4 years ago and then £20,000 3 weeks ago, my ''overall a total return in over 4 years'' wouldn't look too good.
Clearly the current investment position couldn't be classed as a ''return in over 4 years''.
I personally don't include dividends to offset/add to changes in day to day capital values.
My own current average buying in price is 324p, so if i sold now I would consider that I had made about 10p per share loss no matter how much I had received in dividends .
Of course others would include dividends - an individual choice.
lti - I take your point. My initial purchase was in May 17, and I have continually added since. Hence my overall return to date of 5.5%.
Whilst an investment in May 17 would have returned 26.5% in dividends to date, that initial capital investment would be worth 12.5% less today than when invested. So, for me, whether I decide to sell or not the value of my capital has reduced.
BTW, you don't 'surrender' any capital or make a gain on capital until you have sold the shareholding.
''I have a considerable holding here. I first purchased in May 2017. Since then I've received dividends to the value of 14.6% of my total investment but have surrendered 9.1% of my capital. So, overall a total return of 5.5% in over 4 years''
A purchase in May 2017 after xd at say 360p would have given an investor including the forthcoming 5.9p, total dividends of 95.1p representing about 26.5% return on capital invested.
Obviously if the dividends had been reinvested in further shares the total return would be even better.
Gerry557 - thanks for taking the time to respond. You are correct when you say that there are times when the market drags everything down. Covid being an example. It's how investments recover from these events and the overall total return that's delivered that's important to me.
During 2020 calendar year the total return here was around -4%. If I compare that with some of my other holdings that performance was poor. However, 2020 was a strange year so a 4% loss was not the end of the world. But to continue to stagnate through 2021 is unacceptable. Whilst some other holdings have continued to perform well my fear for HFEL is that it's going to turn out to be another income paying holding that flatters with the level of income on offer but continues to erode your capital along the way.
I have a considerable holding here. I first purchased in May 2017. Since then I've received dividends to the value of 14.6% of my total investment but have surrendered 9.1% of my capital. So, overall a total return of 5.5% in over 4 years. That's why I'm asking myself whether this is actually a good investment or if I'm simply being fooled by the level of dividend on offer.
I was also going to wait until after xd to make a purchase but I wasn't expecting a downturn in price in the days running up to xd.
When I signed into my account yesterday the shares were 313p to buy. I chanced an order at 310p which I wasn't really expecting to be triggered, but it was. I will be more than happy to make a further purchase on any significant fall from the current level.
zac0_4, its not just HFEL that suffered. Lots of dividend/high yield stocks, cut or reduced payments and their share prices tumbled. Look at the banks that were forced to stop dividend payments.
There are times when the market drags everything down, Covid and financial crash are examples. If you understand why and its temporary issue then it is a good time to buy as longtimeinvestor highlights. The problem is most people dont cos it looks bad and by the time things look better the SP has risen. When things are rosy you pay a much higher price. Hence buy the dips, saying.
If you were happy before, then buying 17% cheaper looks good to me whist it climbs that wall of worry. The lower the entry point the more flex you have when future dips come. That dividend also gives you the cash to buy more cheaper shares thereby reducing your over all costs, increasing the portfolio and having even more cash for the next time. I like lower prices but Im a buyer. Things might change one day then Ill want all the spare prices to rise cos then Ill be a seller. Still with this you can take the divi without having to sell so its probable better with time in the market than actual timing of the market. A low price doesn't mean the lowest price. So funkhouser I would be too worried as it likely to look like a blip in 10 years time
My initial plan was to top up after the ex divi date as I expected it to be 5.9p lower, then the equity issues kicked in which I think had an effect. We should still get the dip tomorrow but will it drift lower over time without the divi support. Ill keep watching but suspect we will be back in the 320s in time.
I suppose the premium on the price needs to be accounted for and might take a while to feed through so now to wait and see where we go. I think my account will be in the red for a little while until Ive had a few dividends coming in. Will winter cause another covid bout and another market dip who knows but there is always a black swan somewhere, so be a boy scout and be prepared
The crash took the price down to about 200p which would have made an excellent entry point.
I would be happy with over 7% income and gradually increasing without any growth in share price. Prior to the world financial crash there had been good capital appreciation as well.
Is it good value? I'm beginning to really question whether it is. On the basis that you can't really use 2020 as a realistic comparison I've gone back to July 2019.
Had you invested then you'd have received dividends to the value of approximately 12% of your investment. In return your capital would be 17% less in value.
That's not good value in my book.
I have dividend payments due on Friday and intended to top up my holding here. After looking at performance over the last 2 years, and further, I'm beginning to wonder whether this is the best place for a further investment.
''price should be even lower after ex-dividend.''
dividend money leaving HFEL - 5.9p