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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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''They are led to believe that the fund produces a natural yield of 12%, including some options income.''
Yes , correct- they are currently paying 6.1p per quarter which is about 12% based on the current price. Of course that will not be the case if underlying assets/market improve on asset values from the recent slump.
Damienmore refers to a "natural yield". You deliberately left out the word natural in your description of yield which makes your statement correct but does not make Damienmores's statement incorrect as you imply.
Both statements do not refer t the same yield. You refer to the actual yield of HFEL.
There was also the one I posted some time ago but I do not want to repeat the same posts.
Ade
what incorrect statements would they be?
LTI
You have posted a lot f incorrect statements though you suggest you are some kind of moderator.
I think deliberately incorrect.
GS
''around the time of the Great Financial Crash (as far as I can make out)..... Make of that what you will about him.''
and yet another complete and utter LIE.
You are simply another one to add to the list that goes down this route.
Gs
''Boasts regularly''
and in addition comes out with a complete and utter LIE (you do yourself no favours)
Gs
normal response as usual from someone not liking the simple facts
Bott
Give all the waffle a rest.
HFEL is what it says on the tin.
lti does seem to suffer from a form of verbal diarrhoea, having posted ten of the 14 posts since my last. it would be nice if he or she contributed to what could be a serious debate about what mike kerley is doing, but even when he or she states, “i am simply having to point out the facts,” he or she doesn’t. assertions are not facts.
lti wrote, “hfel issue shares at a premium when there is a demand – end of”, but has shied away from attempting to show, in actual money terms, how this benefits existing investors, even though he repeatedly asserts that it does. if he or she is so certain of this, it should have been a simple matter to do what i asked and provide us with the figures, but lti’s posts are barren of facts.
the last directors’ report tells us that 3,855,000 new shares were issued for a net £11.0mn. that’s an average of 285.34 pps. the downward sloping share price graph in 2021/22 was fairly smooth, so it might not be unreasonable to assume an average price from the starting point (301.5) to the finish (281.0). that average is 291.25, or 292.25 if one allows 1pps for the offer price being above the mid price. this is actually 7p greater than the average price at which the new shares were sold, suggesting a deficit rather than a premium. we should politely assume that mk did better than that, but was it more than 12 pps better? if it wasn’t, there was no gain at all from the so-called premium and we have all been fooled.
as my last post revealed, the increase in ‘other expenses’ in 2021/22 was £196,000. that is equivalent to 5 pence for each of the new 3,855,000 shares issued that year. so to break even, so to speak, on the issue of new shares, mk needed an extra 7pps to equal the average in the market and another 5pps to cover the extra costs. that would have been a price of 297.34, raising another £462k, just to break even. it should be noted, of course, that whereas the supposed premium from the sale of the new shares would have been a one-off, the increased expenses will occur every year.
lti has also written, sarcastically no doubt, “i tend to make investments knowing what the investment is.” we’d all like to think that, but how can lti know what the investment is when he seemingly focuses solely on the dividend yield and not only ignores other matters but refuses even to consider the issues that others are raising, preferring to **** them off? very disappointing, especially in someone who is supposedly a long term investor.
we will soon have a new annual report to consider. i can’t be alone in hoping that lti will study it carefully, before launching into another grandstanding performance.
Dam
''Investors have been misled.''
No they haven't - I knew what I was buying
''They are led to believe that the fund produces a natural yield of 12%, including seme options income.''
Yes , correct- they are currently paying 6.1p per quarter which is about 12% based on the current price. Of course that will not be the case if underlying assets/market improve on asset values from the recent slump.
Lloyds bank are able to make double digit totals returns at the moment, due to the low market valuation.
''The managers churn the portfolio''
They have stated that they are not a buy and hold fund - I knew that before I purchased.
hfel
'' tend to change the portfolio when companies are fully valued, when circumstances change or when better opportunities present themselves''
btw - you are whinging about your HFEL investment decision.
Long Time Investor, You are an odious cretin with the graces of a rat. What your really simple obnoxious brain doesn't understand is that it's not just a case of investors selling their shares and fking off if they are not happy. Investors have been misled. They are led to believe that the fund produces a natural yield of 12%, including seme options income. It does not do this. The managers churn the portfolio to produce the outsized yield, and they obfuscate the degree to which they do so. They never mention this strategy in the annual report and the contribution to income.
If you're tired of repeating yourself, then don't - just fk off and stop whinging about others expressing their views.
Currently at 213p, so HFEL trading at a good discount
Gs
?
is was advice ''if they no longer like it''
No point keeping an investment you do not like - better to leave and find something more palatable
GS
you are getting rattled - cannot accept the clear facts.
''So in your own words, WHAT DO YOU NOT UNDERSTAND ABOUT THIS? ''
I understand that HFEL ARE AN INCOME FUND
''That is what he wrote''
and?
HFEL ARE AN INCOME FUND - monies from sale proceeds are invested to produce INCOME and not into a growth company paying Zero in dividends.
hfel
'' tend to change the portfolio when companies are fully valued, when circumstances change or when better opportunities present themselves''
If get very tiresome repeating -
Investors had a choice whether to invest or not - if they no longer like it, sell and fk off.
When i make an investment, I know what I am buying.
Gs
''Are you saying ALL the funds that are invested into stock about to go ex-dividend come from new issuance?''
Did I say that?
HFEL are an INCOME FUND
HFEL
''' tend to change the portfolio when companies are fully valued, when circumstances change or when better opportunities present themselves''
When referring to the turnover of already owned stock MK wrote: "We also top up holdings into ex-dividend dates to ensure maximum revenue generation".
So in your own words, WHAT DO YOU NOT UNDERSTAND ABOUT THIS? You claim to have been some bigwig in HSBC with your £xx,xxx,xxx portfolio, so this should be simple for you. MK is not referring to funds from new issuance because he refers to that later. He is referring to funds from the sale of already held stock, which is then invested in soon to go ex-dividend stock. That is what he wrote.
Are you saying ALL the funds that are invested into stock about to go ex-dividend come from new issuance?
Because that is not what MK has wrote.
So where has the money come from?
And you don't get to tell me what I can and can't do. Stop being so obnoxious.
If you are not happy with hfel , sell and fk off. it is far more preferably than the endless whinging.
Gs
''Monies from new shares ''are invested into existing positions with a focus on companies about to go ex dividend TO ENSURE EXISTING SHAREHOLDERS REVENUE IS NOT DILUTED'''
what do you not understand from this?
Gs
''NO NEED TO MAKE STUFF UP.''
''So if stock is sold to invest in other shares that will soon go ex-dividend, and then sold again afterwards, rinse and repeat, what would you call that?''
THAT IS MAKING THINGS UP.
Hfel
'''' tend to change the portfolio when companies are fully valued, when circumstances change or when better opportunities present themselves''
what do you not understand from this?
Bott
''This will no doubt help the sale of new shares, but please explain how we benefit from the premium at which they are sold. ''
This is obvious and has been gone through already. HFEL issue shares at a premium when there is demand - End of.
People can go through as many figures as they like.
People can come up with as many conspiracy theories as they like.
People can make as many whinges as they like .
The bottom line is that investors have a choice whether or not to invest in HFEL.
If an investor for some reason after knowing the type of investment that has been made, is no longer happy with the investment, there is a sell button.
I tend to make investments knowing what the investment is
"You are now simply making things up. . Who has stated selling stock in order to purchase others about to go xd?"
What is made up about MK's answer when referring to turning over stock that is already held (NOT NEW ISSUE) that they "also top up holdings into ex-dividend dates to ensure maximum revenue generation". Where have those funds come from is they are not new issue and they are not from sale of other stock?
As for the rest of your answer, please note that I have already agreed with you that new issuance at a premium is a marginal benefit to existing shareholders and there is no dilution. SO NO NEED TO MAKE STUFF UP.
Gs
''Why do you have to be an obnoxious prat about everything?''
I am simply having to point out the facts, when people start to speculate.
I m going to have to do it again
''When referring to the turnover of already held stock (NOT new issue) he wrote: "We also top up holdings into ex-dividend dates to ensure maximum revenue generation"''
HFEL ARE AN INCOME FUND
''So if stock is sold to invest in other shares that will soon go ex-dividend, and then sold again afterwards, rinse and repeat, what would you call that?
As I said, it is close to an admission but is not an admission per se''
You are now simply making things up. . Who has stated selling stock in order to purchase others about to go xd?
Who has stated that stock is sold immediately after going xd? .
HFEL
'' tend to change the portfolio when companies are fully valued, when circumstances change or when better opportunities present themselves''
THAT IS WHEN THEY SELL AND BUY
Monies from new shares ''are invested into existing positions with a focus on companies about to go ex dividend TO ENSURE EXISTING SHAREHOLDERS REVENUE IS NOT DILUTED''
Dividend washing in selling stock immediately after going xd.
An active fund will seek out better investment opportunities when they arise, as has been stated by HFEL.
My last paragraph to lti was inadvertently chopped. Here it is in full.
A final thought for you to consider. As new shares have, we are told, been continually issued at a premium, that obviously suggests there is an appetite for them. So, if new shares had not been issued to satisfy that appetite, the would-be investors would have had to buy them in the market. Usually, when there is a demand for shares and their number is capped, the price goes up, so existing investors enjoy the boost, but when more shares are pumped into the market that doesn’t happen. Oh dear.
LTI
The directors of HFEL will be pleased to have someone as knowledgeable and forthright as you to defend and promote their strategy. This will no doubt help the sale of new shares, but please explain how we benefit from the premium at which they are sold. How much did this come to in 2022 and where does it appear in the accounts? Is the amount greater than the additional costs incurred, such as increasing audit costs to which I have previously drawn attention (up 23% in 2022).
Have a look at page 50 of the 2022 annual report. This details all ‘Other expenses’. The total increase was £196k, up 21% (the directors got 12%,). How does this compare with what might have been raised from the premium, do you suppose? Would you please do the calculation and share it with us. I have shared my research in several posts, beginning in response to monkeyman99 on 2/9/23.
Monkeyman99 wrote, “Having gone through the portfolio it is clear this portfolio should had been trimmed down and the asset manager is clearly struggling with this portfolio due to its size.” That prompted me to post this.
“It is evident to me that HFEL has been repeatedly issuing shares in order to buy additional earnings and profits with the proceeds, so that it can continually increase its dividend. One adverse consequence is that the accompanying dilution substantially reduces the effect on its EPS/DPS. Another, which is a real danger, is that in straining to acquire more dividend income HFEL is buying companies of increasingly poor quality, which will hold the capital value back when markets recover. These are the stats for the past 4 years: revenue up 33.7% and profit after tax up 37.9%, BUT EPS up only 9.9% and dividend up only 10.2%.”
Do these facts not suggest that at least some of the additional capital has been wasted?
As Napoleon found, constantly increasing the size of your empire can lead to disaster, not glory.
In my letter to Ronald Gould I wrote, “In your chairman’s statement last November you claimed that the NAV had grown by 1.9%, but that is at odds with the Janus Henderson fact sheet. That shows minus 6.7% for the 12 months to June 2022 and minus 1.6% for the full five years to June 2023.” His reply did not address that apparently deliberate misinformation. Do the directors (paid £183k in 2022) actually know what is happening?
You like to deride other posters, but you do not address the facts, nor try to justify your opinions with evidence. This is hardly helpful to others, even if it leaves you feeling smug.
A final thought for you to consider. As new shares have, we are told, been continually issued at a premium, that obviously suggests there is an appetite for them. So, if new shares had not been issued to satisfy that appetite, the would-be investors would have had to buy them in the market. Usually, when there is a demand for shares and their number is capped, the price goes up, so existing investors enj
Why do you have to be an obnoxious prat about everything? You just can't help yourself on multiple boards.
When referring to the turnover of already held stock (NOT new issue) he wrote: "We also top up holdings into ex-dividend dates to ensure maximum revenue generation". So if stock is sold to invest in other shares that will soon go ex-dividend, and then sold again afterwards, rinse and repeat, what would you call that?
As I said, it is close to an admission but is not an admission per se.