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Ade, you confuse me with your inconsistency and capriciousness:
"The Mangers are actually not that bad but they have been constrained by having to produce an unrealistically high dividend."
How can you say they are not that bad? Previously you lamented how bad they are compared to a better era under the previous manager, Michael Watt, and you have spoken out about the dividend stripping. Moreover, the manager has not been constrained by a mysterious external force. They are empowered to set the level of dividend and protect the trust's capital. They were not forced to churn the portfolio and erode capital. They have managed the trust "badly".
You change your tune as quickly as a nightclub deejay, Ade.
Ade, you confuse me with your inconsistency and capriciousness:
"The Mangers are actually not that bad but they have been constrained by having to produce an unrealistically high dividend."
How can you say they are not that bad? Previously you lamented how bad they are compared to a better era under the previous manager, Michael Watt, and you have spoken out about the dividend stripping. Moreover, the manager has not been constrained by a mysterious external force. They are empowered to set the level of dividend and protect the trust's capital. They were not forced to churn the portfolio and erode capital. They have managed the trust "badly".
You change your tune as quickly as a nightclub deejay, Ade.
Realist1, were you asleep when you read the report?
"Our Fund Managers had sought to enhance income and offset sterling strength through portfolio rebalancing but this had a negative impact on capital growth. Our analysis has now led us to revise the way in which we capture dividends, an approach that has too often led to diminished capital growth."
The "rebalancing" referred to is, at least in part, the recycling capital in to cum dividend stocks. You might not understand the nuances of the wording but it is a fact that Mike Kerley churned the portfolio to this end. He has now been discharged of his portfolio selection duties, and I take this as the board's acknowledgement that Kerley's approach and techniques were not working. Apparently he is retiring from asset management in 2024, and I hope he stays retired. Probably best he takes up his motor racing hobby full time.
No disrespect to PCTN holders, but I hope Picton do not successfully merge with UKCM. I am a holder of UKCM and can only see that pctn shareholders will benefit from a sucessful merger (we won't). You have a large office allocation (a liability in my view) and you will also dilute the reversionary yield that is coming online within the UKCM portfolio. If Picton succeed it will be an injustice to UKCM shareholders, unless we receive a premium in recognition of the quality of the portfolio. Sorry to paint a "you and use" picture, but this is what it is, and the merger proposals by Picton are a downright cheek in my opinon.
No, it doesn't really do much at all apart from rail road UKCM investors in to having the assets managed by Picton. There may be costs savings from scale, and the fact that Picton is internally managed, but other than this I consider this an unwanted distraction. As an investor I want to see ABRDN concentrate on managing the portfolio and realise the reversionary yield available within the properties, thus increasing the dividends available to shareholders.
I want Picton to b*gger offer, frankly.
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.
JPPoubelle, Your humility is commendable, and will save you from a future of hardhip and stress. Most people can't cope with the ego dent of making a mistake, and carry on with the same patterns of behaviour over and over and over again.
You did indeed make a mistake investing here. Social Housing is an untested asset class, and I would contend not a safe investment for this reason.
Please be a boring investor. Read Tim Hale's book and it will gorw your wealth sensibly, and save your marriage!
A Morningstar article from 4th May 2006:
https://www.morningstar.co.uk/uk/news/59764/henderson-far-eastern-promise.aspx
Can you believe that at the time of writing the article in 2006, the NAV of this trust was 231.3p. The NAV was 14% higher, 17 years ago!
Michael Watt, if you are dead, I hope you are not rolling in your grave. The fund managers who succeeded you are total clowns and are destroying our capital !! They think it's okay to have weak conviction, with 100% portfolio turnover creating large transaction costs, and believe that by trading in to cum-dividend companies they are getting something for nothing. But apparently according to them, this is okay. It's "style".
JPPoubelle, I have read your posts and, with all respect, you are a typical emotional investor who gets caught in the buy high, sell low trap. This is not for you, and you should not make an investment in to a single company again. Read smarter investing by Tim Hale, and avoid this type of madness. All The best To You.
FF, do you really day trade and make a living, or are you pulling all our plonkers?
Up she goes, as expected.
canetoad,
"you seem to have this idea that issuing new shares and diluting existing shareholders is a great idea".
if you worked in the broking community for 20+ years i hate to think of the damage you must have done, because you are totally clueless. investment trusts don't dilute shareholders on an assets per share basis when they issue new equity and use the proceeds to buy more of the underlying assets. in the case of hfel they have (unbelievably) issued new shares at premium, so this will have been accretive to existing shareholders.
the reason the nav per share has declined is because the value of the underlying assets has tanked . it's got nothing to do with the issuance of new equity, it's the asset managers making poor asset allocation decisions.
good god. the number of people who come on here with a ****tail of arrogance and ignorance. it's cringing.
Falconer-Flyer, of course, I think the same as you. The shares are undervalued but there are good reasons for the neurosis. Punter64, commercial property market dynamics are not the same as residential property, so you should view Halifax's comments this morning in the correct context.
Thank you, Bott. I would admit that the letter in response by Ronald Gould is very well crafted.
The price gyrates due to uncertainities in the market. Sometimes it's up, sometimes it's down. There's no significance to it and it could easily end up in the red by the end of the day.
Rylidan, it's got nothing to do with shorters, it's the general sentiment towards the company. It operates in a real estate market where the demand for its properties is highly constrained and concentrated to care providers, which has a negative impact on the company in terms of the balance of power. If a care provider can't pay its rent, it's not a simple matter of evicting them and re-letting a property in the open market to normalise the income. Instead, as can be seen, when a care provider fails to pay rent SOHO has little option but to tolerate it and suffer the negative impact on income.
Furthermore, this real estate sector is not subject to open market pricing for rent; it is controlled indirectly by the government, and so it is significantly exposed to central government budget and regulatory risk. This is not so favourable in the current climate, where government and local authorities are seeking to control costs and mitigate inflation.
My opinion is that as a longer term investment this is a buy at current levels, but let's get real and understand the risks the market is currently pricing in.
Hi Actuary63,
Yes, correct. Putting it another way, if 10% yield is required from underlying investments yielding 5% annually, then the way to arrive at 10% is to get 5% twice. How to do this? Buy stocks that are about to pay a dividend and when said dividends have been paid, sell the stocks and recycle the money in to different companies leading up to their ex dividend. It really is simple maths that not many on here have the brain for.
This strategy can be successfully hidden if stock prices are rising, but in a stagnant or declining market it can create a doom-loop of reducing capital values and the need to recycle more and more capital to create the income. The possible eventual outcomes are:
1. The capital destruction becomes so great the manager puts his hands up and says "oops, we need to reset the dividend".
2. The Asia Pac markets recover strongly, the manager gets away with it, and says "phew".
3. The manager makes some excellent stock picks that boost the capital value of the trust, and says "phew".
Outcomes 2 and 3 are looking less likely as time rolls on. Would you want to take a risk on the manager finding a get out of jail free card up his sleeve?
On the Citywire forum investors in Hendeson Far East Income are actually willing to face the truth that this trust is converting capital in to income. One comment on this forum refers to the trust as "eating itself", which I thought was a good way of putting it! other comments refer to the obfuscation committed by both the managers and the board of directors, who are meant to act in the best interests of shareholders.
https://moneyforums.citywire.com/yaf_postsm242296_HFEL--Henderson-Far-East-Income--I-just-bought-more--having-2nd-thoughts.aspx
I wonder if the investors here will ever face the truth, even though it's staring them in the face.
Ade, this is hilarious. It's like a social experiment. Did you notice how LTI acts like a baboon when you presented actual evidence (instead of dogma) that the underlying holdings of this trust do not support its outsized yield? Instead of a measured, logical response, he starts beating his chest. He also purported to being smart, which was so funny it made my day yesterday. Please keep provoking him with the truth, because it is wonderful entertainment.
LTI, are you okay? You appear to be on repeat mode. We know you bought shares at 210.5p and we know that the capital values of assets very over time. But this is not the topic of discussion. We are talking specifically about the performance/conduct of the HFEL managers and relative performance of the trust, which has been poor.
Your repeated reference to the trust performing in line with the Hang Seng is absurd. All you are doing is pointing out the fact that the trust, somehow, failed to benefit from diversification, as HFEL is an Asia-Pac fund with an investment mandate to seek opportunities across multiple asia pacific markets. You are simply pointing out the failure and taking comfort in it. It looks like "longtime" investing hasn't made you smarter.