Dod101 wrote:SalvorHardin wrote:For me Henderson Far East Income (HFEL) does what it says on the tin. It produces a very high yield, currently 7.2%, in part by selling options but mostly by holding a lot in high yieldering sectors, notably banking, mining and telecoms. It provides massive diversification away from the UK, Europe and America, whilst steadily increasing its dividend. Don't invest in it for capital growth though.
What about buying HFEL and JAGI for a 5.6% yield? Or HFEL in combination with another fund(s)?
What bothers me about HFEL is modest capital growth would be fine but a capital loss of around 10% over the last 5 years is not. Admittedly the current 7.5% yield probably more than makes up for that but even so I do not like that and it reduces the total return somewhat.
Take say Schroder Oriental Income. It has a modest yield of about 3.8% but a 22% capital growth over the same 5 years. I am not clever enough to work out a total return but it cannot be far off the same as HFEL. The one trust is more than keeping up with inflation; the other is losing its real value.
I think I may cut my HFEL holding and buy some Schroder Oriental Income but am in many ways not being very decisive in anything at the moment.
Dod
A 22% capital growth over 5 years equates to just over 4% per year, so a TR of 7.8% for SOI.
A 10% capital loss over 5 years equates to around 2% pa, so a TR of 5.5% for HFEL.
5 year dividend growth is 3.7% for HFEL and 5.2% for SOI.