Henderson High Income Trust


#1

Originally published at: https://whichinvestmenttrust.com/henderson-high-income-trust/

What is Henderson High Income Trust? Invests in a prudently diversified selection of both well known and smaller companies to provide investors with a high dividend income stream while also maintaining the prospect of capital growth. Invests mainly in UK equities though up to 20% can be invested overseas The investment selection process seeks to…


#2

I see that the analysts at Morningstar UK yesterday (12 April) updated their free-to-view (for registered account members) report and opinion of the Henderson High Income Trust (HHI) that concluded with the paragraph …

“Despite relatively weak performance through 2016, we feel that the fundamentals here remain solid and that Smith’s investment approach and that of the wider global equity-income team remain consistent in their mildly contrarian, mid-cap, and value style bias. We maintain a Morningstar Analyst Rating of Neutral.”

Has a long time user of Morningstar, it’s their usual practice to neutrally rate a fund when there is a change of manager. In the case of HHI; it’s previous long-time manager *Alex Crooke stepping back further out of the picture in order to allow the trust’s former co-manager David Smith the room to do his own thing.

*Since 2013 Alex Crooke has been Henderson’s Head of Global Equity Income and is the lead manager of Bankers Trust (BNKR), the group’s international flagship investment trust. So, I would think it could well be a case of having a lot of other things on his plate to deal with that necessitates Alex Crooke delegating a greater degree of responsibility to David Smith.

While maintaining a neutral stance, Morningstar’s updated report also expresses certain reservations about HHI’s recent NAV performance and management fees structure, in as much as …

“Long-term returns are good, and the fund has a higher-than-average yield. Performance in 2016 was negatively impacted by the domestic and smaller-company nature of the portfolio and the relative lack of overseas earnings when compared with peers.”

“The base fee is reasonable but the performance fees, when triggered, can reduce its competitiveness compared with its category peers.”

I’m of the view that this lack of equity exposure to companies with overseas earnings will prove a handicap for certain funds when the time comes for UK PLC to go it alone.

Re: Morningstar

Over the years Morningstar UK has become my first ‘free’ port of call for investor fund data. Other UK sites like FE’s Trustnet and the pages of Citywire can often fill in many of Morningstar’s blank spaces but don’t have the global coverage of this Chicago-based investment research heavyweight.

To open a Morningstar account is free. All that’s required is first name and surname, and an email address and password. As a D-I-Y fund investor, I wouldn’t be bothered paying for the premium option which is aimed at the likes of IFAs who require more in-depth levels of research on behalf of clients.

Access to analysts’ views and reports on both UK open and close-ended funds for the basic level free accounts is generally confined to the more popular and liquid of funds run by the larger fund management groups. For those wanting guidance to go off-the-beaten-track so to speak, then payment is required.


#3

I use the Morningstar data on The AIC website. I’m time poor @forrado so I tend to look at recommended trusts here on the WhichIT website and in the Telegraph as a basis to work with.

For me, completely doing my own research takes too much time, I need a little bit of help with someone curating a list for me to work with.

I have registered with Morningstar now though. Thanks for the tip :slight_smile: