Hi @CityGirl, HFEL does have an active discount control in place and the results can be seen in the RNS releases titled ‘Issue of Equity’ available from on the AIC and LSE web-sites (others too , no doubt).
Interestingly, Edison’s downloadable research note answers your reserves question (PDF): http://www.edisoninvestmentresearch.com/?ACT=18&ID=11224
I would class Aberdeen Asian Income and Shroder Oriental Income as being the realistic alternatives to HFEL. HFEL does boost the yield by writing options and this - theoretically - should limit the capital upside. But from an income perspevite, that is likely to be lower priority. It could mean a higher level of turnover of assets too, if there is forced selling due to an option being exercised: this has been an observation/criticism over on TMF. But again, that might be thinking in terms of total return rather than income return.
What I do see with the three of them is that there are times (and timescales) where one has outperformed the others - in TR terms - so you takes your pick as to which one suits. I hold AAIF myself, which I first bought at its IPO.