High Yield Investment Trusts - AIC Sector and Yield table (September 2023)

[Itsallaguess]

‎
Below is a table of AIC-listed Investment Trusts which yield 3.5% or higher on September 1st 2023.

The table is shown grouped by AIC sector, and then ranked in descending order of yield for each sector, and also shows relevant Discount or Premium information, along with the 5-year dividend growth-rate for each Investment Trust, and with an additional column showing the relevant OCF charges including performance fees. A figure for each Investment Trust showing 5-year total-return is now also included in the data.

Please note - the company names in the table below are URL links to the respective AIC 'Portfolio' page for each investment, which will then show the underlying holdings, geographic breakdown, and other useful company-specific information. From there, other tabs on each AIC page can then lead to related areas such as Overview, Performance, Dividends, Charges, and others...

If anyone wishes to replicate this type of data-set themselves at any time, there are some simple instructions at the bottom of this post on how to do that...





I've dip-checked the above data, but please do note that it should be used only as a starting-point for further investigation, and it should certainly be the case that you should carry out your own due-diligence on any data that you may use for any subsequent investment decisions that you might wish to make...

A good source to cross-check some of the above data, if anything does look interesting or even suspicious, is the TrustNet website, which also gives yield and discount information for these types of investments - https://www.trustnet.com/

Here are some instructions to be able to generate up-to-date yield-data in the future, using the above excellent AIC website -

1. Open the AIC website (https://tinyurl.com/yawfc9zy)

2. Select the 'Choose your AIC Sectors' button, and then click 'Deselect all sectors' and then 'Reselect all sectors, followed by a manual un-selection of all the lower 'VCT' sectors group.

3. From within the 'Sectors' window, select the link on the bottom right labelled 'Select your data points', which will then open the data-points selection window.

4. In the 'Data points' window, click 'Deselect all', and then manually select TIDM, Management Group, AIC Sector, Traded Currency, Total Assets, Discount/Premium, Share Price Total Return (5-year), 5yr Div Growth Rate (% pa), Ongoing charge including performance fee, Dividend Cover (yrs), and Dividend Yield (%)

5. Close the 'Data points' window

6. Select the 'Finish and Save / Print' button, and in the window that appears, make sure to un-select the 'Include AIC sector weighted averages' box, and then select the box marked 'Enable Print Mode', before closing that window

7. The presented AIC data can now be copied and pasted into a spreadsheet, and then filtered by sector or yield as required.

• Please also note that if you don't select the 'Enable Print Mode' option during the above process, and you then try to copy the data into a spreadsheet, then it's likely to only copy some of the data...

Cheers,

Itsallaguess

[moorfield]

‎
Below is a table of AIC-listed Investment Trusts which yield 3.5% or higher on September 1st 2023.

Thanks IAAG. Apropos of nothing here's fifteen of that list from different AIC sectors. This isn't the HYP PHY I would choose for myself, but I think you'll get the gist...

[Itsallaguess]

Apropos of nothing here's fifteen of that list from different AIC sectors. This isn't the HYP PHY I would choose for myself, but I think you'll get the gist...

Thanks moorfield - a little racy for my own tastes to be honest, with yields and management charges that would make my eyes water in some cases, but you're quite right in terms of being able to simply achieve a well-diversified set of income-holdings that can then just be held for the long-term without any day-to-day fuss.

I'm happy to fish in the 5% - 6% yield window with most of my income-oriented Investment Trusts nowadays, and so long as I'm achieving a good level of geographical and sectoral diversity then I'm broadly content with things going forwards.

I think my days of trying or even needing to shoot the returns-based lights out are well behind me now, and I'm happy that my portfolio of mid-level yielders continues to trundle on without giving me any trouble at all...

Cheers,

Itsallaguess

[moorfield]

I think my days of trying or even needing to shoot the returns-based lights out are well behind me now, and I'm happy that my portfolio of mid-level yielders continues to trundle on without giving me any trouble at all...

I'm getting close to that point too. 9 of the 15 I currently hold in my HYP PHY are AIC "Dividend Heroes" and I will likely add more from that list in future.

[Arborbridge]

I think my days of trying or even needing to shoot the returns-based lights out are well behind me now, and I'm happy that my portfolio of mid-level yielders continues to trundle on without giving me any trouble at all...

I'm getting close to that point too. 9 of the 15 I currently hold in my HYP PHY are AIC "Dividend Heroes" and I will likely add more from that list in future.

But I am wondering about the largish holding I have in HFEL.... giving me some of my own money back in dividends in exchange for a declining capital base. OK, it isn't "mission critical" or in urgent need of correction but I'm not too happy with it, as it is not doing what I want. Which begs the questions: how long to wait, how much to trim?

Arb

[moorfield]

But I am wondering about the largish holding I have in HFEL.... giving me some of my own money back in dividends in exchange for a declining capital base. OK, it isn't "mission critical" or in urgent need of correction but I'm not too happy with it, as it is not doing what I want. Which begs the questions: how long to wait, how much to trim?

Well it occurs to me one can apply a TJH-style balancing system just as well to an HYP PHY. I hold HFEL, probably bought at much lower price than others here, but the cost and income weight limits I use mean that it will unlikely be eligible for top-up for a long time. So I'll leave it be, and reinvest overall income elsewhere in the meantime. As for trimming from X% above median, Income IT prices behave differently wrt. their NAVs than individual shares - I would probably not trim unless a holding was X% above median, AND above NAV, AND I could upcycle into a higher yield.

[Arborbridge]

But I am wondering about the largish holding I have in HFEL.... giving me some of my own money back in dividends in exchange for a declining capital base. OK, it isn't "mission critical" or in urgent need of correction but I'm not too happy with it, as it is not doing what I want. Which begs the questions: how long to wait, how much to trim?

Well it occurs to me one can apply a TJH-style balancing system just as well to an HYP PHY. I hold HFEL, probably bought at much lower price than others here, but the cost and income weight limits I use mean that it will unlikely be eligible for top-up for a long time. So I'll leave it be, and reinvest overall income elsewhere in the meantime. As for trimming from X% above median, Income IT prices behave differently wrt. their NAVs than individual shares - I would probably not trim unless a holding was X% above median, AND above NAV, AND I could upcycle into a higher yield.

For yeras I have had a HYPTUSS devoted to ITs, but I'm not treating them as equal weighted like shares, therefore I approached buying more or trimming in a quite different way. I have several "big hitters" who provide a substantial part of the income, plus smaller IT holdings for diversity. Core and satellites, in other words.

[Charlottesquare]

Well it occurs to me one can apply a TJH-style balancing system just as well to an HYP PHY. I hold HFEL, probably bought at much lower price than others here, but the cost and income weight limits I use mean that it will unlikely be eligible for top-up for a long time. So I'll leave it be, and reinvest overall income elsewhere in the meantime. As for trimming from X% above median, Income IT prices behave differently wrt. their NAVs than individual shares - I would probably not trim unless a holding was X% above median, AND above NAV, AND I could upcycle into a higher yield.

For yeras I have had a HYPTUSS devoted to ITs, but I'm not treating them as equal weighted like shares, therefore I approached buying more or trimming in a quite different way. I have several "big hitters" who provide a substantial part of the income, plus smaller IT holdings for diversity. Core and satellites, in other words.

I am similar, main markets I want to target tend to end up with a full cost investment (NAIT, Murray Int, JPM I & G, Edin IT, Blackrock NA etc,) but more niche/specialist plays ( like Blackrock World Mining, Vina Capital , Warehouse REIT etc ) get smaller investment and tend to only get at most to half main investment costs before I stop buying.

[staffordian]

But I am wondering about the largish holding I have in HFEL.... giving me some of my own money back in dividends in exchange for a declining capital base. OK, it isn't "mission critical" or in urgent need of correction but I'm not too happy with it, as it is not doing what I want. Which begs the questions: how long to wait, how much to trim?

Arb

After many months of pickering about this, I sold my entire HFEL holding last month and distributed the proceeds among three holdings which have a lower dividend yield but will hopefull continue to offer a far higher overall return. My original plan was to be very Dorisian about my holdings and assume that even HFEL would get it's moment in the sun, but the longer I held it, the less confident I was that it might.

But I am in the fortunate position of not currently needing the income from my IT portfolio, so going for sturdier prospects seemed a no brainer. All I was doing before was watching HFEL decline whilst investing it's income in other ITs

[Arborbridge]

But I am wondering about the largish holding I have in HFEL.... giving me some of my own money back in dividends in exchange for a declining capital base. OK, it isn't "mission critical" or in urgent need of correction but I'm not too happy with it, as it is not doing what I want. Which begs the questions: how long to wait, how much to trim?

Arb

After many months of pickering about this, I sold my entire HFEL holding last month and distributed the proceeds among three holdings which have a lower dividend yield but will hopefull continue to offer a far higher overall return. My original plan was to be very Dorisian about my holdings and assume that even HFEL would get it's moment in the sun, but the longer I held it, the less confident I was that it might.

But I am in the fortunate position of not currently needing the income from my IT portfolio, so going for sturdier prospects seemed a no brainer. All I was doing before was watching HFEL decline whilst investing it's income in other ITs

Once you have that high level of income flowing, it is quite difficult to jack it in, so that's admirable. My thought is that I could do some trimming of said IT without too much heartache on the income difference.
But into what, as an equivalent? AAIF, perhaps - though I haven't looked at it lately. Perhaps I should.

PS - just found out 7.6% of AAIF is in Taiwan Semiconductor! That's huge.

[Dod101]

After many months of pickering about this, I sold my entire HFEL holding last month and distributed the proceeds among three holdings which have a lower dividend yield but will hopefull continue to offer a far higher overall return. My original plan was to be very Dorisian about my holdings and assume that even HFEL would get it's moment in the sun, but the longer I held it, the less confident I was that it might.

But I am in the fortunate position of not currently needing the income from my IT portfolio, so going for sturdier prospects seemed a no brainer. All I was doing before was watching HFEL decline whilst investing it's income in other ITs

Once you have that high level of income flowing, it is quite difficult to jack it in, so that's admirable. My thought is that I could do some trimming of said IT without too much heartache on the income difference.
But into what, as an equivalent? AAIF, perhaps - though I haven't looked at it lately. Perhaps I should.

PS - just found out 7.6% of AAIF is in Taiwan Semiconductor! That's huge.

If you are referring to HFEL, just convince yourself that you are not getting real income from HFEL and that would surely make the cutting of it much easier. If you have say £10,000 on deposit and get say 5% on deposit, you still have the £10,000 at least nominally a year late plus the income. If you buy HFEL with it, from its record of the last few years you may get 11.03% income but how much can you expect of your £10,000 of shares after that year?

I gave up on it some time back. It gives generously with one hand and takes a lot of it back with the other. If it is not in an ISA or SIPP you will pay tax on the gross income figure as well, not the net figure if the funds were simply on deposit.

Dod

[staffordian]

Once you have that high level of income flowing, it is quite difficult to jack it in, so that's admirable. My thought is that I could do some trimming of said IT without too much heartache on the income difference.

Exactly this...

If you are referring to HFEL, just convince yourself that you are not getting real income from HFEL and that would surely make the cutting of it much easier.

I didn't look for an alternative; I started my transition from HYP to ITs back in 2016 with Luni's B7 but subsequently added HFEL for what at the time looked like good income, followed by FCIT, SCS and (unfortunately!) BRGE.

The latter was despatched at the same time as HFEL having given neither good dividend income or the hoped for capital growth. The proceeds of the two sales went to FCIT and BNKR, both of which appear to be better long term bets.

The third purchase with the proceeds was a side bet (entirely urelated to this portfolio) on Games Workshop. I originally bought 325 of these at 142p back in 2001 and sold them for a 50% profit a few weeks later. That original investment of less than £500 would now be worth just shy of £35,000, even ignoring all the dividend payouts. Such is the value both of hindsight and long term buy and hold, of which I was more or less ignorant then...

[CryptoPlankton]

Once you have that high level of income flowing, it is quite difficult to jack it in, so that's admirable. My thought is that I could do some trimming of said IT without too much heartache on the income difference.
But into what, as an equivalent? AAIF, perhaps - though I haven't looked at it lately. Perhaps I should.

PS - just found out 7.6% of AAIF is in Taiwan Semiconductor! That's huge.

If you are referring to HFEL, just convince yourself that you are not getting real income from HFEL and that would surely make the cutting of it much easier. If you have say £10,000 on deposit and get say 5% on deposit, you still have the £10,000 at least nominally a year late plus the income. If you buy HFEL with it, from its record of the last few years you may get 11.03% income but how much can you expect of your £10,000 of shares after that year?

I gave up on it some time back. It gives generously with one hand and takes a lot of it back with the other. If it is not in an ISA or SIPP you will pay tax on the gross income figure as well, not the net figure if the funds were simply on deposit.

Dod

I'm not sure why I keep finding myself defending HFEL, I really have no axe to grind! However:

Firstly, you ARE getting "real" income, the dividend is completely covered by revenue.

Secondly, is there anything in the fundamentals to suggest the share price will continue the decline that started with the COVID outbreak, or is it simply the trend (i.e. past being a guide to the future) influencing that judgement?

At the risk of repeating myself, I'll copy and paste what I said on another thread (please ignore if you've read it before!):

I have to say that, despite its poor performance since Covid, HFEL has been a quite satisfactory contributor to my "income" portfolio. In fact, over the first four years from purchase (Feb 2016) it produced a very healthy TR of about 60%, 25% of which was in the share price. Of course, that 25% only comes to fruition if you sell and, since then, that gain has turned into a capital loss of 13%. However, the 35% of dividends over the first four years was obviously locked in and, together with the dividends since then, it still all adds up to a TR of about 57% over the 7.5 years.

Okay, so that means a small loss over the past three years or so, I hear you say. Well, yes, but that is why I like income investing - I'm really not concerned, the income has been edging up each year. Is it a "wealth destroyer"? I'm not really sure what is meant by this. The dividend is fully covered by income so it isn't eating into the capital that way. The capital performance was decent (given the size of the dividend) over the first four years, and poor (assuming no major twists in the next few months) over the next four. Who can tell me what the next four years have in store? If the decline in SP is what makes it a wealth destroyer, then the same can be said about nearly all equities over a selected period. Scottish Mortgage (SMT) has often been touted as a great growth investment which, of course, it was if you bought at the right time. However, if you had bought in November 2021, you'd be sitting on a loss of 50% compared with a loss (TR) of 6% if you had bought HFEL at the same time. So, by that token, it appears SMT is actually a huge wealth destroyer!

Seriously though, I think there is a danger of attributing too much significance to past performance, particularly over arbitrary time periods. A 5-year performance today could look dramatically different (better or worse) if looked at again in six months time. And it really doesn't tell us anything about the future (that's Investing 101, isn't it?). Looking at HFEL today, I see a fully covered 10% dividend and no reason to believe the SP will tank at a sustained rate to significantly offset this over the coming years. Equally, I see nothing preventing the possibility that the SP trend could reverse. Obviously, I could be wrong but, in the context of my wider portfolio, it feels like a pretty good bet as a small contributor to my pension over the long term.

And, for me, it is the long-term that matters. Three years downturn is nothing in the grand scheme of things, and certainly not worrying enough to cause me to churn my portfolio. I have no idea which Asian IT's are going to perform the best over the next 5 to 10 years so why would I risk going from the frying pan into the fire for a drop in income. I will only get concerned if and when the dividend ceases to be sustainable.

Finally, I certainly wouldn't "trim" a holding that has reduced in value - isn't that the opposite of what trimming is meant to be about? That does strike me as a good way to erode capital!

Besides, the SP is up 4.83% this week - annualise that and it's not such an obvious sell...

[Itsallaguess]

Besides, the [HFEL share price] is up 4.83% this week - annualise that and it's not such an obvious sell...

I've been keeping a watchful eye on HFEL for a while now, as I've wondered if there might be an opportune time to make what would be my first income-related purchase, but the primary aspect that's usually kept me away has been in relation to it's long-term Premium/Discount situation when compared to other Asia Pacific Income IT's.

Looking at the five AIC sector members listed in that category, we can see the relative Premium/Discount situation in the following table, ranked by discount -

Company name                  | EPIC | AIC sector                 | Discount / premium (%) | SPTR 1yr (%) | SPTR 3yr (%) | SPTR 5yr (%) | SPTR 10yr (%) | Div yld (%)
Henderson Far East Income     | HFEL | Asia Pacific Equity Income |                  -1.22 |       -14.84 |       -10.28 |       -10.93 |         38.41 |       11.01
Schroder Oriental Income      | SOI  | Asia Pacific Equity Income |                  -4.01 |        -3.12 |        18.81 |        20.27 |        107.12 |        4.66
JPMorgan Asia Growth & Income | JAGI | Asia Pacific Equity Income |                  -8.49 |        -4.22 |        -6.79 |        23.24 |        139.58 |        4.84
Invesco Asia Trust            | IAT  | Asia Pacific Equity Income |                  -9.62 |        -1.77 |        27.26 |        39.86 |        173.86 |        4.61
abrdn Asian Income Fund       | AAIF | Asia Pacific Equity Income |                 -11.01 |        -4.21 |           21 |        23.04 |         54.45 |         5.3

The stand-out question for me when looking at the above table, on top of asking the elephant-in-the-room question as to why such a relatively large yield-anomaly might exist, is also to ask how such a relatively poor set of multi-year total-return figures for HFEL has still left it in such a good position in terms of comparable Premium/Return figures, which then leads to taking a more focussed view on the individual long-term Premium/Discount figures for all five of the above Asia Pacific Income IT's -

Five-year Premium and Discount charts for the above -



Example Trustnet source page for the above Premium and Discount charts (HFEL) - https://www.trustnet.com/factsheets/T/j408/henderson-far-east-income-ltd/

Now, I haven't done any deep analysis on the above linked charts, but what looks to stand out is that HFEL seems to have been persistently rated higher than it's AIC Sector peers in the last 5-year period, which has then led me to ask two questions that have kept me out up to now, and happy to continue with my 'interested observer' status -

1. Has there been a good justification for the long-term peer-related Premium/Discount anomaly shown in the above linked charts?

2. Is there a possibility that any past justification is currently working it's way out of HFEL, where it might settle into a longer-term 'Discount' situation, similar to it's AIC Sector peers?

Not knowing the answer to any of the above questions has kept me out of HFEL up to now, and I will be interested to see how things play out over the near and medium term in these areas.

Cheers,

Itsallaguess

[Dod101]

In their recent Annual Report HFEL shows a capital return which has been negative for each of the last five years whilst managing a steady increase in the dividend.

Furthermore recent figures show a discount to NAV of only 2.06% and a yield of 11.01%.

Something does not feel right. I think that is the dilemma. Part of the answer is that they seem fairly successful at writing share options to boost the dividend income. If there is not something like that why would the other comparable trusts not be getting a comparable yield?

I will leave HFEL to others.

Dod

[CryptoPlankton]

Each to their own, of course. I wouldn't want too much of my portfolio in this kind of investment, but I believe in diversification in all respects, and HFEL seems to fit well with my other holdings. At this rate, it will have returned my investment in dividends alone within four years, beyond which any income certainly couldn't be seen as a return of my own capital - and any value to the holding would be pure profit ("money's fungible", TR and all that). I find it hard to see a scenario where this investment can end up being one of my disasters now (and there have been a few - particularly in my early more speculative years!).

However, I understand people's reservations, and we all need to make decisions in the context of our own circumstances and needs.

And thanks for this regular feature, IAAG, it's always interesting to peruse!

[Wuffle]

Anybody think this has echoes of NCYF?

W.

[Dod101]

Anybody think this has echoes of NCYF?

W.

What is NCYF? OK New City High Yield Fund. It is more than 80% invested in corporate bonds, quite a few in what I would regard as second tier companies. I do not see much of an echo with HFEL.

Dod

[Wuffle]

In so far as....

high yield, just seems to give your money back.
Yet can sustain NAV despite nobody being able to give a good reason.

W.

[daveh]

I've held HFEL for a while now as an alternative to IAPD (a high yield Asia Pacific ETF) the ETF has performed better TR but yield has been lower. I bought into NCYF more recently as I think bonds will do well both income and capital terms in the years ahead. I will admit I probably bought too early, but it's difficult to pick the bottom. I think they will do well as we are close to the bottom for fixed interest, but could well be wrong. I may buy more soon.