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Trust Insider: a global income newcomer HINTs at its potential

by James Carthew on Jul 23, 2014 at 14:27

Trust Insider: a global income newcomer HINTs at its potential

The global equity income sector only used to have a couple of members but in recent years it has been expanding as new funds have been launched and others have broadened their remits.

Just over three years ago Henderson launched a fund for this market, Henderson International Income (HINT). This week, I thought I’d have a closer look at it.

At launch, HINT raised just £41.5 million; not as much as Henderson was aiming for, which was up to £150 million.

It has grown since then but even today it is not a particularly large fund. It has a market cap of £78 million and gross assets of about £90 million. The expansion was achieved in part through performance and in part through tap issues of stock and a C share issue that raised £21 million gross for the fund in November 2013.

HINT currently trades on a small discount – just shy of 3% – but for most of its life it traded at a premium, barring a brief period around the end of 2011. The discount only really appeared at the end of 2013, unfortunately just after the C share issue.

HINT aims to provide a high and rising level of dividends, as well as capital appreciation over the long term, from a focused and diversified portfolio of overseas (ex UK) stocks.

In the first 16.5 months of HINT’s life it paid dividends totalling 5.4p – which annualises at about 3.9p. In the year to end of August 2013, dividends totalled 4p and in this accounting year the dividend has risen again. The quarterly run rate (all the funds in the peer group pay quarterly dividends) today is 1.05p – 5% higher than a year ago.

Best in NAV terms

The yield HINT generates is a bit below average for its peer group – British Assets churns out a yield of 4.7%; Midas Income & Growth , Murray International and Scottish American all sit on yields of around 4%; HINT’s yield is 3.6%. What it lacks in yield though, it more than makes up for in total return.

Over three years, HINT is the best performing fund in its peer group in net asset value (NAV) terms – up 32.5% versus an average of just 20.6%. The peer group numbers are dragged down by Scottish American, Murray International and British Assets.

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Look up the investment trusts

  • Henderson International Income (Ordinary Share)
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  • Henderson International Inc C (Ordinary Share)
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  • British Assets (Ordinary Share)
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  • Seneca Glb income & Growth Tru (Ordinary Share)
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  • Murray International (Ordinary Share)
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  • Scottish American (Ordinary Share)
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Look up the fund managers

  • Ben Lofthouse
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