Member Info for Damienmoore

Ade, I find it really peculiar that you believe it to be the fault of investors for unwittingly placing their money with an investment manager of an income fund who is dividend washing. If the manager followed the core principles set out by the Financial Condut Authority pertaining to the fair teatment of customer (TCF) and transparency, we would not be having this argument. The manager will have already told us all, truthfully, how the income is produced.

I invested in HFEL for income from a portfolio of companies in the Asia Pacific region. When I invest in an investment trust I am looking for a covered dvidend (most of the time) from the underlying companies without return of capital. I actually avoid investment trusts who return capital as income, such as the European Assets Trust, because I am looking for the underlying businesses of the trust to be true dividend payers.

The capital value of my investment trust holdings, as Long Time Investor states, is irrelevant, so long as the income keeps coming in. Murray International has been a poor performer versus a global index tracker on a total return basis, but this does not matter because the income has kept coming in for me. It has served my objective.

However, with HFEL it is different. Every time they buy a company cum-dividend that same company loses capital value the moment it goes ex-dividend, and this strategy has been eroding the capital of the trust (it simply converts capital to income), and at some point they will have to stop doing it, such will be the extent of the capital depletion (particularly in a falling market). There will be insufficient capital to recycle to achieve the level of income required to maintain and increase the dividend.

This could leave investors with both a reduced capital value and income from the trust, and herein lies the source of my objection. No investment trust manager of an income fund should behave in this way. It is appallingly bad.

I have a relatively small allocation to the trust as I have spread my investments across 21 vehicles. I just feel really sorry for those who have put a large allocation of their retirement wealth on to HFEL, not knowing what they were really getting in to. Perhaps if the investment manager had told them via their various publications, they would have made a different decision. It angers and saddens me in equal measure.

Hi philpot1001, that's the kind of homework you can do yourself if you want to ask the wrong questions. The more approproate question is how has Kerley performed *relative* to his peer group. Answer: abysmally.

Noted, JohnJunior, I am appreciative of your negative opinion of the managers. Most on here defend them because they remain under the enchantment of the yield - the ongoing magic trick that's going wrong, but keeping most people fooled.

Johnjunior, I don't understand your point. The ASX200 is up 2.15% over the past year, the Kospi up 2.37%, Nikkei 225 up 13.06%. This is a far east/asia pac fund - there is plenty of Asia Pacific markets to choose from where success can be found, so I don't buy the idea that the problems in China are an excuse for poor management. I also don't buy the idea that it's okay because another manager is also in a minority group making a pigs ear of things.

Ade2a, You are absolutely correct. The HFEL managers do not have a buy-and-hold stategy, even though they mislead shareholders by giving the impression they hold a "portfolio" of shares, 50% high yield, 50% dividend growth - in their own words! They are continually recycling shareholder capital to produce the yield, selling holdings ex-dividend and buying in to companies that are closer to declaring dividends. This is destroying the trust's capital in trading and transaction costs, and converting capital in to revenue.

The latst Edison reports (17th July) states: "At end-May 2023, HFEL’s top 10 holdings made up 31.4% of the fund (Exhibit 5), which was a notably lower concentration compared with 37.3% six months earlier; just two positions were common to both periods."

Unbelievable; this means that at least one third of the trust's capital was recycled in a 6 months period.

The managers have lost the plot. They have no conviction and are chasing yield to the point of self-destruction. Someone at Janus Henderson needs to intervene and give them their medicine. What they are doing does not constitute investing. They are traders. Traders are not investors - they are fools.

I continue to bang the drum that Mike Kerley and Sat Duhra are reponsible for capital erosion via the recycling of capital to chase yield i.e. dividend stripping. They also trade options, which may also had the effect of converting capital in to income. However, it's the investors in this fund who are complicit in the foolishness, as they continue to be lured by the artificial yield, and today the trust trrades at a 3.32% premium to NAV. Until investors stop being fools and start asking questions, the managers will continue to issue equity and make copious amounts of money in fees, from failure.

What a wonderful job - to get paid significant amounts of money, year after year, for failure.

Yes Roley, I would be much obliged. Please list the trusts trading at 52% discount to NAV.

Not particularly clear and concise, roley. He bemoans the large discount to NAV the shares trade at, but didn't allude to a credible reason why the stock is unpopular - which is the large management fees, relative to NAV, that risk eroding the capital down to a point where the trust will not have sufficient scale to continue.

Agreed with regards to this trust. Worth holding for a high and covered dividend from value opportunities across the UK market cap spectrum. I do not agree with you about HFEL, which generates a high proportion of income via options and capital recycling.

Do people really invest in this vehicle? Look at the accounts. The NAV is £10,588,000 versus an investment management fee of £413,746. That's 3.9%. If that's not enough, of the £318,933 "administration expenses" £126,785 is paid on salaries.

With the share price down 37% over 5 years, I can't help putting all the facts together and asking the question "who is this vehicle run for?"

I think on a simple winners versus losers analysis, you know the answer!!

It's thinly traded, that is why the spread is soo large. BUT, on a different matter, the CEO spent half a million quid on share purchases on 13th June. That is a serious commitment.

Woooooo Hooooooo. It's raining bargains!! Fill your boots is all I can say, and lock in income yields that will make a difference to your life in the longer term. A true bargain hunter's paradise.

I think this is an all-time low.

Taken a bit of a dip recently, so will top up. This is a decent global equity income ETF with very low charges. Buy and forget.

This is a decent global income ETF with low charges. I won't hesitate to add more as time progresses.

Can't believe the price remains depressed. This is a lowly geared REIT with quality properties, most of which won't fall foul of the EPC legislative changes. Recent lease negotiations have provided evidence that the underlying reversionary yield is higher than the current level. So investing here will mean you can buy in to a growing dividend, starting at circa 6%. What is it I am missing here?

A great diversified global income ETF that's taken a dip. I will be buying more at these levels.

A core holding for me, now looking cheap. Buy buy buy.

timst, this is because it is a diversified REIT, unlike REITS like UKCM which are overweight warehousing. Pensioncraft explain it well: https://www.youtube.com/watch?v=SktFmV0f9dI

Still going lower! Good job I'm not a wealth manager, eh? Investing here has been wealth mismanagement, ha ha.