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HFEL
eain
Posted: 31 May 2018 10:11:37(UTC)
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What are others opinion of this trust.
Pays good income and supposed long term capital growth, however the long term capital growth seems a bit poor. Has anyone any suggestions for alternatives?
Keith Hilton
Posted: 31 May 2018 12:24:11(UTC)
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I held HFEL for several years but was disappointed by the performance. Last year I switched into JAI, which although it has a bit lower yield, is on a double digit discount, whereas HFEL is on a premium. TER is lower for JAI as well.

If yield isn't a concern, then SDP also looks a good value alternative.

Make sure that you're happy with the weighting to China, since this varies considerably between Asia Pacific funds, as does the constituent companies.
3 users thanked Keith Hilton for this post.
Guest on 31/05/2018(UTC), Mike L on 31/05/2018(UTC), Tim D on 31/05/2018(UTC)
Mr Helpful
Posted: 31 May 2018 14:18:56(UTC)
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Steady performer for an income biased portfolio.
Unlikely to shoot the lights out.
May not appeal to would-be get rich quick investors.
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dlp6666 on 01/06/2018(UTC)
PaulSh
Posted: 31 May 2018 14:53:30(UTC)
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Keith Hilton;63182 wrote:
Make sure that you're happy with the weighting to China...

Very good point. The exposure to China eventually got too high for my liking so I replaced it with AAIF.
Jim S
Posted: 31 May 2018 16:23:00(UTC)
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PHI has had an amazing year (or 5), but isnt cheap, plus you may not want Japan included.

SDP is at a 12% discount, so maybe a better bet than ATR

You could also check out Hermes Asia ex Japan equity, Old Mutual Asia Pacific and BG Pacific if you don't mind funds

FAS has been subdued for a while, but its low on Chine I think (it would cover China with FCSS added though!)
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Mike L on 31/05/2018(UTC)
Keith Cobby
Posted: 31 May 2018 18:02:14(UTC)
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I hold HFEL (and Pacific Horizon for growth) and total return has been pedestrian lately. I have been concerned that high portfolio turnover has been necessary to provide the yield. However, I much prefer it to AAIF which I sold a few years ago. Aberdeen's Asian trusts have been terrible performers since the financial crisis. If I sold HFEL I would buy the Schroder trust.
2 users thanked Keith Cobby for this post.
Jon Snow on 31/05/2018(UTC), dlp6666 on 01/06/2018(UTC)
Jon Snow
Posted: 31 May 2018 22:58:06(UTC)
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I hold HFEL for the yield now and for the long term 20 - 30 years + for my kids, it's mostly in my SIPP.

Other funds/trusts may perform better, whatever "better" means to you, I'm still happy to hold HFEL.
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dlp6666 on 01/06/2018(UTC)
Jon Snow
Posted: 31 May 2018 23:04:02(UTC)
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This could also have a major impact -

China A shares added to the MSCI -

https://www.cnbc.com/201...f-emerging-markets.html
2 users thanked Jon Snow for this post.
Tim D on 31/05/2018(UTC), Haleric on 01/06/2018(UTC)
mark spurrier
Posted: 03 June 2018 07:58:40(UTC)
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This is good timing

I bought £20k of SOI and the same of HFEL 3 years ago+

SOI is winning but both are a bit lame on a total returns basis. My HFEL holding has been flat for a long time (my buy was well timed) so I am showing a good profit as I bought below £3.

I am splitting these two and adding SDP in equal weight. I think that the drive to hold/grow income may be hampering the total return. If you look at SDP/SOI both managed by Dobbs. SDP is a very clear winner on total return 18.6 v 11.6 TR annualised over 3 years and HFEL at 8.75

Over 10 years, SDP/SOI are virtually the same c 12.5% with HFEL at 8.92....that 3.5% is significant
Keith Cobby
Posted: 03 June 2018 08:33:11(UTC)
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Mark, with the funds I hold I have noticed a strong correlation between total return and yield. Consequently, during the past decade I have moved from yield considerations to being concerned with total return only. The only three funds I hold which yield 3% or over are now HFEL, HINT, Scottish American..

I also hold EAT which is different in that it pays dividends from capital reserves as well as income. The long term total return has been very good although dropped lately. Other trusts are also now targetting a higher yield by paying out a percentage of NAV.
mark spurrier
Posted: 03 June 2018 10:16:38(UTC)
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Yep

I am unconvinced that "dividend" investing is much use

I read something by Buffett/Munger on the same which made the fairly obvious point, often repeated by Terry Smith and Nick Train looking at the ROCE on a company. If you can get 15% return by investing within the company why is it good for shareholders to be given a dividend at all unless they can invest that to yield a return greater than 15%.

I would much rather get a 15% compound capital growth than a 5% dividend and minimal growth

I have had this debate many times with those who invest for high yield. I don't follow their logic at all. A portfolio stuffed with BT, centrica, card factory etc would just make me nervous :)
Mr Helpful
Posted: 03 June 2018 13:57:27(UTC)
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mark spurrier;63306 wrote:
I am unconvinced that "dividend" investing is much use
I read something by Buffett/Munger on the same which made the fairly obvious point, often repeated by Terry Smith and Nick Train looking at the ROCE on a company. If you can get 15% return by investing within the company why is it good for shareholders to be given a dividend at all unless they can invest that to yield a return greater than 15%.
I would much rather get a 15% compound capital growth than a 5% dividend and minimal growth
I have had this debate many times with those who invest for high yield. I don't follow their logic at all. A portfolio stuffed with BT, centrica, card factory etc would just make me nervous :)

Some standard answers which are unlikely to be fresh thinking:-
+ Proof of financial soundness, not illusory profits (accountants et al).
+ Unlikely to need to return to capital markets, self funding with cash left over.
+ Will handle retained earnings more carefully, rather than splash it around on aggrandizement or other
+ Data suggests that most of historic market returns has come from dividends and reinvesting those dividends (but that is not a reason to overweight today's dividends at the expense of dividend growth)
+ No dividends the 'Gordon Equation' cannot be applied.
+ Dividends come along on a regular calendar basis whereas capital gains do not. Important for income reliability in later life.
+ Through market cycles positions move in and out of desired yield parameters (i.e. may come to meet the patient investor's yield criteria), to open up more (or less) possibilites.

Agree total return matters above all.
But must it be taken to extremes? Dividends or no dividends?
Suggest that where the investor has reached in their investment career might signify to some degree?
Still seeking rapid growth or taking foot off the pedal with less risk?

Good (bad) avoid examples chosen, dividends so last century 8-)
2 users thanked Mr Helpful for this post.
Alan M on 03/06/2018(UTC), Guest on 04/06/2018(UTC)
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