Edison Update on Henderson Far East Income: Strategic Moves to Enhance Returns

Henderson Far East Income (HFEL) is taking steps to reposition its portfolio to boost total returns, following an underperformance due to overexposure to Chinese consumer stocks and cyclicals. These stocks anticipated a post-pandemic economic bounce-back that did not meet expectations, impacting the company's revenue in the financial year ending 31 August 2023. To address this, HFEL's board has utilized reserves to maintain its dividend payments, providing flexibility to invest in other market segments with potential for better yields and growth.

Lead manager Sat Duhra has adjusted the portfolio by reducing Chinese holdings and increasing investments in potentially undervalued stocks in India and Indonesia. This repositioning has shown positive outcomes, contributing to HFEL's market outperformance in the six months leading to March 2024. Despite these changes, HFEL's shares continue to trade at a premium of 1.5%, closely aligning with its historical average. The strategic portfolio adjustments are expected to continue supporting HFEL’s performance and shareholder value.