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aims to provide a high level of dividend as well as capital appreciation from a diversified portfolio
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Ct
''Are you questioning how the number of shares has grown? That's a fact.''
and?
'' Shares in issue have increased about 40%, while the book value has decreased about 7%. The share price has decreased by 47%.''
and?
were shareholders not aware of a falling share price?
are shareholders not aware of falling asset values of the underlying stocks?
@longtimeinvestor: Just for your benefit again!
From Oct 2017 - Oct 2023, Shares in issue have increased about 40%, while the book value has decreased about 7%. The share price has decreased by 47%.
@longtimeinvestor:
Are you questioning how the number of shares has grown? That's a fact. You don't seem to understand the effect that has on the shares of a company.
What's your problem - are you a paid promoter for the fund? These channels are of use for sharing factual information about stocks,. which is what I've done. I intend to continue doing that here. They're not for people paid promoters to continually ramp an investment.
Yes Realist1 very frustrating but the whole market has been stagnating with little growth since covid , I haves batch of high dividend shares and there's a few disasters amongst them , I'm holding for the long term(5-10 years) to compound the invested dividends so there will be many ups a d downs in that time but hopefully things work out .
Biggest worry at the moment is world instability Russia-Ukraine, Israel-Hammas and the possibility of China-Tiawan conflict which will make the previous 2 wars look like sideshows if the US gets involved , unfortunately very little we can do about these global troubles .
If I run a comparison chart, it is clear to see that HFEL is tracking the Hang Seng Index downwards. So, we are clearly not alone in this and all we can do is wait for the region cycles back to recovery rather than blame the way the fund is managed.
Oct 2022
As at close of business on 26 October 2022, the unaudited net asset value per share, calculated in accordance with the AIC formula (including current financial year revenue items), was 245.0p.
As at close of business on 26 October 2022, the unaudited net asset value per share (excluding current financial year revenue items) was 236.9p. Earnings were 8.1p.
Oct 2023
As at close of business on 25 October 2023, the unaudited net asset value per share, calculated in accordance with the AIC formula (including current financial year revenue items), was 216.8p.
As at close of business on 25 October 2023, the unaudited net asset value per share (excluding current financial year revenue items) was 213.1p. Earnings are 3.7p
It is possible that there is a change in the dates the dividends are received and this has some contribution to the weaker earnings. I will not count on that.
It is likely HFEL will not cut the dividend until they have to and they still have somewhat substantial reserves.
The earnings did not exceed any of the dividend at next xd date in January. We will need to compare the pre xd earnings in April about 1.9p to assess the earnings base further.
Ct
''one immediately wonders what has happened to the extra cash generated from the share sales.''
ffs, maybe you should leave it now - further nonsense statements do not serve you well.
If the value of the portfolio has not materially increased, one immediately wonders what has happened to the extra cash generated from the share sales. A natural question to ask is where precisely that cash has gone. Something does not add up here.
There's no conspiracy theory needed.
From Oct 2017 - Oct 2023, Shares in issue have increased about 40%, while the book value has decreased about 7%. The share price has decreased by 47%. i.e. the assets of the company have *not increased at all*, while the share count has ballooned. That explains the drop in share price...
Bun
No, they went XD yesterday (6.1p) - hence the fall in share price, but the good news is that you can purchase now at about 9p lower than on Wednesday
If you buy today can you still collect the divi next month? Thanks
Tod
''People that can’t play ups and downs should stick with deposit accounts.''
absolutely correct - some people start making up conspiracy theories when invested assets in markets take a downturn.
HFEL have recently increased the dividend to 6.1p per quarter.
There are some very high yielding stocks around now because of falling capital values helped along with the alternative of safe high rates of returns on cash.
Ct
''The number of shares has increased each year, i.e. investors have been consistently diluted''
as i said - something wrong with your logic.
New shares have been issued at a premium
HFEL sell has generally sold shares at a premium to NAV and bought additional stock with those shares. Fixed costs will of course be distributed across shareholders but the company itself takes a management fee as a percentage so revenues for directors etc increase.
As a benchmark, JCGI which is a pure China play is down from £8 a share to £2.23 in the past 2-3 years.
People that can’t play ups and downs should stick with deposit accounts.
Some people need to apply dome thought as well as reading below:
“ To your point on share issuance, we have increased the premium at which shares can be issued to ensure that existing shareholders benefit from the uplift of issuing new shares at a premium to net asset value. The increase in the size of the Company has the additional benefit of spreading the costs over a wider shareholder base. The proceeds derived from issuance are invested into existing shareholdings with a focus on companies that are about to trade ex-dividend to ensure that the revenue reserve is not diluted by new shareholders.”
@Longtimeinvestor: Let's make it simple.
It is an indisputable fact that the share count has consistently increased every year since 2017
Without a corresponding increase in the net assets, the Book Value per Share (aka NAV per share) must drop.
The number of shares has increased each year, i.e. investors have been consistently diluted. While the Book Value is 'fairly' static, i.e. the assets owned by the fund have not changed significantly (actually, they have dipped slightly over the past few years, for the obvious reason that global shares have dropped). That's why Book Value per Share has decreased... In the long term, the share price tends to follow the Book Value per Share (NAV/share).
Average Shares (x million)
2017: 116
2018: 121
2019: 126
2020: 137
2021: 145
2022: 152
TTM: 154
Book Value per Share (pence)
2017: 375
2018: 359
2019: 359
2020: 301
2021: 300
2022: 281
TTM: 258
Ct
''and in seeing the obvious issuance of new shares being a logical reason for the declining share price..''
I am afraid that there is something wrong with the your logic processing
The one (fairly obvious) thing here is the consistent issue of new shares. The Book Value is actually quite flat over time, while Book Value per Share drops consistently with the increasing share count... Share price almost always follows NAV/share in the long-term, which explains the continued decline.
These are reasons enough to avoid this share. I had trimmed my (small) holding a while back due to the China exposure, but have now exited entirely, mainly on technical grounds (Note to Self: TOTALLY AVOID 'investing' in a perennially dropping asset) and in seeing the obvious issuance of new shares being a logical reason for the declining share price..
Re: the ''dividend washing' mentioned below. I very much doubt that. The description/discussion below sounds like utter BS.
@silverknight: "The divi has disappeared in sp fall this morning. Surprise surprise"
Why is this a surprise? What is your point? This typically happens on every stock/bond/etc. It's not unusual.
For any asset that pays a dividend/coupon, the asset price will always (momentarily) fall by exactly the amount of the dividend/coupon or else there is an arbitrage opportunity.
Thank you, Bott. I would admit that the letter in response by Ronald Gould is very well crafted.
The divi has disappeared in sp fall this morning. Surprise surprise
Thank you for your efforts here Bott,like a lot of other shareholders here I am well under water having an average buy price of 2.80 .It will be interesting what is stated in the financials this coming November.
Thank you for your letter dated 2 October 2023, which I and my fellow directors have received. Thank you also for your support of the Company through your investment with us. I appreciate that, at present, the overall return you see on this must be disappointing to say the least.
The links which you included in your email were informative; we do keep track of the sentiment towards the Company through various media channels and letters received from our investors are shared with me.
While we have maintained a progressive dividend, capital performance has been poor since 2020. For the 3 years to 31 August 2023, total return performance was -4.9% with the share price total return at -10.3% for the same period. Although the dividend yield at 31 August 2023 was 11.2%, we acknowledge that this has benefitted from a falling share price.
We do, however, understand why we have reached this position and I, along with the Fund Managers will elaborate on this point in the annual report which is due to be published in the not-too-distant future. As you can imagine we, as a Board, spent a substantial amount of time this year considering the investment strategy – its appropriateness over the long term and in the current market conditions, the yield of the portfolio and projections for dividends from the Asia Pacific region, as well as the positioning of the portfolio along with the prospects looking ahead for the portfolio and the region in general. We concluded that the strategy remains appropriate and can deliver a progressive dividend alongside capital growth; it has done so in the past and we believe it will do so again in future.
To your point on share issuance, we have increased the premium at which shares can be issued to ensure that existing shareholders benefit from the uplift of issuing new shares at a premium to net asset value. The increase in the size of the Company has the additional benefit of spreading the costs over a wider shareholder base. The proceeds derived from issuance are invested into existing shareholdings with a focus on companies that are about to trade ex-dividend to ensure that the revenue reserve is not diluted by new shareholders. As you rightly point out, the value of the shares issued over the last few years is considerable, but these are issued periodically and the proceeds always invested in a timely fashion to ensure there is a little or no impact to performance, income or existing shareholders.
I would urge you to keep an eye out for the latest financial results which will be published in November. My statement and the Fund Managers’ report will provide more detail on performance, but also on the future positioning of the portfolio specifically to address the issues that you have raised.
Please feel free to get in touch with me again should you have any further concerns after the annual report has been published.
Yours sincerely, Ronald Gould, Chairman
I have received a reply from Ronald Gould, via Janus Henderson. This will appear in my next post, but experience suggests that for a reason I cannot fathom, all capital letters will be changed to lower case. This has happened to my own postings, when I first typed them in Word and then copied them in. It doesn't look nice, but the meaning is, mostly at least, quite clear.