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How AA-rated Henderson is positioned for a special dividend bonanza
by Danielle Levy on Sep 19, 2013 at 09:08
As a result, he recently bought into oil and gas exploration and production company Circle Oil.
Although financials represent Henderson’s second largest sector weighting at around 27%, the fund manager remains lukewarm on the prospects for UK banks and holds the majority of the allocation in insurers.
‘It is difficult to know what the earnings and dividends are going to be. I feel it is simpler to invest in more visible things in the market. If you think about what is happening in closed life books you can see how cash has come off and debt has been paid down, which gives you greater clarity as a result,’ he said.
Closed life book market
In the closed life book market, Henderson is holding Phoenix and Chesnara. Non-life insurer picks include Hiscox and Amlin, while life insurers Prudential, Standard Life, L&G and Aviva also sit in the portfolio.
He notes that life insurers could stand to benefit and improve their income line if yields rise due to the amount these companies are currently allocating to short-dated gilts.
Buoyed by changes to ISA rules, Henderson is bullish on AIM stocks, which represent 7-8% of the portfolio.
He highlights Scapa, which manufactures adhesive components, as a top pick in this area and expects to see further dividend growth next year.
He also participated in the Conviviality AIM IPO, which is behind the Bargain Booze brand.
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- DS Smith PLC (SMDS.L)
- Circle Oil PLC (COPU.L)
- Phoenix Group Holdings (PHNX.L)
- Chesnara PLC (CSN.L)
- Hiscox Ltd (HSX.L)
- Amlin PLC (AML.L)
- Prudential PLC (PRU.L)
- Standard Life PLC (SL.L)
- Legal & General Group PLC (LGEN.L)
- Aviva PLC (AV.L)
- HSBC Bank PLC (GBB5BP354.L)
- Barclays PLC (BARC.L)
- Conviviality Retail PLC (CVRC.L)