Investments  

Henderson trust’s NAV tops its benchmark

Henderson trust’s NAV tops its benchmark

The Henderson High Income trust saw its net asset value significantly outpace its benchmark during the 12 months to December 2015.

The trust returned 7.6 per cent, compared to the 0.9 per cent return of its benchmark – a composite of 80 per cent of the FTSE All-Share Index and 20 per cent of the Merrill Lynch Sterling Non Gilts Index.

At the start of 2016, the trust was trading at a 7.1 per cent premium before sinking to 2 per cent the following month.

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The annual dividend has grown each year since 2012, with an increase of 3.5 per cent in 2015.

It also has a large 92 per cent exposure to the UK, and its top holdings include British American Tobacco, AstraZeneca, BT Group.

Emma Bird, research analyst at Winterflood Investment Trusts, said the main contributor for good performance was lead manager David Smith’s choice of equities, which make up approximately 75 per cent of the portfolio.

Adviser view

Dan Farrow, director of Essex-based SBN Wealth Management, said: “The performance appears, on the face of it, to be impressive in the context of the wider market.

“I would, however, ask if the benchmarks are the correct ones to choose, as the fund is concentrated into what makes up a small part of the FTSE All Share.

“Perhaps the manager wouldn’t look so good if compared to a small cap index or small cap funds from Fidelity and Standard Life.

“They have gone significantly overweight small companies, so that could be misleading to investors because if I wanted exposure to a small cap fund then I would buy a small cap fund, I wouldn’t buy a high income.”

katherine.denham@ft.com