Henderson Far East Income (HFEL)

Henderson Far East Income (HFEL) is not only the highest yielding trust in Asia, but one of the highest yielding equity-focussed trusts in the entire sector. This has been achieved through manager Sat Duhra’s focus on finding a balance of traditional dividend paying stocks on high yields, with more growth-focussed ideas that give the Portfolio exposure to a number of key themes driving Asian markets. In addition, these larger, more growth-focussed holdings also provide the manager a platform to write options as part of a Dividend overlay strategy, which generates additional income for the portfolio and supports the trust’s yield, which is in excess of 9%, with the dividend per share having grown for 18 consecutive years.

Further supporting this growth is Asia’s improving dividend picture, driven by good capital discipline and increasing revenue, as well as regulatory changes from regional governments to improve shareholder returns. This has led to both higher incomes and capital growth from across the region. One outcome of this is very strong absolute returns in the past year, with HFEL producing a NAV total return of over 40% in the 12 months to 27/04/2026 (see Performance). Sat argues the drivers behind improved shareholder returns remain firmly in place, meaning there is support for this trend to continue.

The high and growing yield has proved popular with shareholders, leading to the trust trading at a premium to NAV for much of the past five years in contrast to much of the peer group (see Discount). This has enabled share issuance, which, alongside the strong absolute performance, has increased the size of the trust and seen it promoted to the FTSE 250 Index in April 2026.