Member Info for Damienmoore

I'd be more upset about the fact the operating expenses of this fund for 2024 were £4.015m compared to the £27.267m in receipts from the hybrid credit investments. The operating expenses are nearly 15% of the receipts. Of this £1.206m were "directors' fees". So the question is, for whom is this fund being managed for?

Hi Ade. Yes, unuderstood. I do like your description that it is an exchange of capital for income. However, my elaboration is that the manager is a gambler as they are hoping to place bets where they keep the income without losing a capital gain. I have known for a long time that my money is in thge hands of short-termist gamblers here. I'm just hoping they start winning their bets so I can get some of my money back.

CJ66, the dividend has nothing to do with it. Investors simply aren't going to allow incompetent people to have their hands on their money. You wouldn't let an incompetent plumber work on your bathroom, or a builder of ill-repute build your home extension. Why would you let an incompetent fund manager make decisions with your hard-earned money?

Ade, selling call options is a form of gambling, as the call option provider (in this case HFEL) is receiving a fee to sell to the buyer the option to buy stock at a certain price on a certain date in the future. If the stock increases in price above the option price the contract holder will exercise the option. In this case HFEL loses the capital gain on the stock and retains the income (the contract premium). HFEL would of course hope that the stock price moves lower, so the option holder does not exercise their right to buy. It is gambling with a downside protection, but it is gambling. If HFEL opens a lot of options and they all lose, then they are simply converting capital in to income (the option premiums) and losing any additional capital from the margin between the option price and the stock price gain.

Broomtree - How is lagging the index and having a capital decline a "remarkable turnaround"? Perhaps I am missing something. Please explain; I would be interested to have your qualification of the remarkable turnaround you are referring to.

Guitarsolo - I would disagree with your point. The holdings of the trust are deeply liquid and not the proverbial large boat you speak of. In fact the trust was able to sell and buy its holdings 1.2x in the last 12 months. I wonder why the trust has such a huge turnover ;-) ;-)

This trust is for gamblers, as the manager has increased options trading (i.e. betting on short term share price movements) and leverage. Let's hope the gambles pay off and I get some of my money back.

Why is everyone referring to Sat Duhra as the "new manager". He is not a new manager. He managed the trust alongside Mike Kerley, and presided over the capital destuction of the past several years.

There's a filter preventing the NAV disclosures showing. Just pop over to the London Stock Exchange to get the NAV:

https://www.londonstockexchange.com/stock/AEI/abrdn-equity-income-trust-plc/company-page.

Anyone happy with their investment here? I'm quite liking the dividends, although we won't see much capital appreciation for a while, I should think.

A really disappointing set of results, with an 11.9% total return significantly lagging the return for the MSCI AC Asia Pacific ex Japan High Dividend Yield Index return of 17.4%. On top of this, another year of capital decline of £6m. This is better than the £90m decline of last year, but the size of company has eroded further still. Where is the bottom?

There will be no hindsight or apology for losing other people's money. They will simply keep taking their investment management fees and saying to themselves "no matter what we do with other people's money, we get paid anyway."

Fregatr, this manager has lost £20 million of investors money when it should be invested in sensible projects that create reliable cash flows. I personally believe this is incompetence, and judging by the share price movement today, the market thinks the same.

I hope I am wrong and the investment works out for you.

You'd be mad to buy shares in a trust where the management have squandered significant shareholder funds on a speculative investment. This is supposed to be a prudently managed environmental assets trust. Unforgiveable. TRUST = GONE.

Total sum of the last 4 dividends including June's payment is £1.82. Yield remains at around 8% and I'm still a happy bunny here.

Same discovery here, zac0_4. Income investing has meant my returns have lagged a global total return index by a significant margin over 15 years. I will remain an income investor, because this is my psychology and it's difficult to switch off a way of being. However, for my pension I intend to simply continue with a Vanguard Target Retirement Fund. I will use the income from my dividend investments (all of which are in ISAs) to fund my monthly pension contributions.

Realist1, as a novice investor you should simply go for an index tracker. The arguments are compelling:

https://kroijer.com

You can't go far wrong with a Vanguard LifeStrategy fund.

Hello Actuary 63,

I don't invest in this trust at all anymore, and nor will I. I simply look at my holding acquired many years ago with disdain, and hold on to it in the hope the manager will have the luck to make me my money back. A crazy logic, I know, but the truth. It is possible also the manager's "style" will go on a good run, but I won't hold my breath. But make no mistake, my trust in all active managers has been wiped out, and for far east exposure I have been adding to my ETF's:

IAPD

LDAG

LDEM

I see no reason why I should put my money in to untrustworthy active management, when an index tracking ETF provides a simpler, cheaper function and better performance without the opacity.

I have very little faith the manager has stopped buying companies cum-dividend, given the opacity within the interview. Janus Henderson, as far as I am concerned, is a toxic investment management brand.

Realist1, I would disagree and say the manager is as opaque as an old dog's eyes. There was no admission that the options trading had increased in the year because they need to convert capital in to income if buying higher quality growth companies. This is the function of put options. He also danced around the question about the top 10 companies not seeming to pay an aggregrate yield that equates to the yield of the trust, but we already know why this is. He did atually admit to being caught out by value traps, which is hard listening given they are paid handsomely to avoid common investment mistakes, including value traps.

The trust has clawed back some of the huge losses I have incurred as a long term investor, and I will continue to hold in the hope that his luck (not judgment) continues.

Anyone who bought these three weeks ago for £2.65 will be creaming their pants, locking in a huge yield and 20% capital appreciation. Incredible, really.

Krustysmegma, the problem would be that the bank account from where cheques would be drawn does not have the cash present! Part of the point of the merger was that it required no cash outlay, and it would save on transaction costs versus buying properties individually. It also allowed CREI holders to benefit from assets at discount.

Guitarsolo, It's not the same as HFEL. The company invests in some ultra-high yielders such as Diversified Energy, Imperial Tobacco and Petershill, so the dividend is covered, but you should understand there are risks associated to a manager gunning for yield in this way. Some investments can see capital values suffer (Diversified Energy is an example!), hence the capital performance has been lacklustre.

But, all said, I want an allocation to a manager who is aggressive on yield, and I think some of the underlying companies are pretty decent. Some of them are a bit speculative too, in my view (I believe Petershill probably is a bit speculative) so it's good to have these "punts" in a fund, because I wouldn't want to invest money in a company like Petershill, directly.

This trust does what I want it to do, as part of a larger portfolio. I think buying at these levels could be fruitful for anyone willing to press the buy button. But again, what the heck do I know !!!

it's just another example where fund managers take gains, shareholders take losses. custodian capital (the fund manager) wanted this deal because it would significantly increase their fee income over time. now that they've failed it's us shareholders who'll suffer the cost, not the manager. now that custodian have lost their credibility, the share price will now trade below nav and make it impossible for the company to raise capital. our company is now also suscepible to buy out; possibly below fair value.

a complete and total **** up.

Did anyone notice this financial highlight in the annual results announcement on 25th March:

"To align Princess with the broader listed private equity universe, the Board agreed for the Company to discontinue the hedging of currency exposures from 1 April 2023."

Oh right, so it didn't have anything to do with the fact the board were responsible for losing 60m Euros of shareholder capital. What was it may father once told me about leopards and spots....

Hello Guitarsolo, my view on this one is that it is an absolute bargain. Buying at these levels means you get a portfolio of high yield, undervalued stocks, at a discount!! And with a covered yield of 8.3%, not sure what's not to like if you are an income investor. Past performance has been poor, and if you bought at £3.75 like I have done, you'd be pretty fed up with the total return performance. However, my view is that both the price point and discount on this trust are compelling. Buy hey, what do I know !!!