| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 91.40 | -53 |
| Intrinsic value (DCF) | 67.65 | -66 |
| Graham-Dodd Method | 1.04 | -99 |
| Graham Formula | 0.37 | -100 |
Henderson High Income Trust plc (HHI.L) is a UK-based closed-ended investment trust managed by Henderson Investment Funds Limited, focusing on delivering high income through a diversified portfolio of dividend-paying UK equities. Launched in 1989, the trust primarily invests in value stocks across all market capitalizations, targeting well-managed companies with strong balance sheets. Its benchmark is a composite of 80% FTSE All-Share Index and 20% Merrill Lynch Sterling Non-Gilts Index, reflecting its dual focus on equity income and fixed-income exposure. The trust appeals to income-seeking investors, offering a dividend yield of 10.65 GBp per share (as per latest data), making it a compelling option in the low-interest-rate environment. With a market cap of approximately £300 million, HHI.L is a niche player in the UK asset management sector, specializing in income generation through a disciplined value-investing approach. Its strategy aligns with long-term investors prioritizing stable cash flows and capital preservation.
Henderson High Income Trust plc presents an attractive proposition for income-focused investors, given its robust dividend yield of 10.65 GBp per share and a track record of investing in financially stable UK equities. The trust's low beta (0.872) suggests relative resilience to market volatility, appealing to risk-averse investors. However, its reliance on UK equities exposes it to domestic economic risks, including Brexit-related uncertainties and inflationary pressures. The absence of debt and positive operating cash flow (£17.9 million) underscore financial stability, but the trust's performance is closely tied to the UK equity market, which may limit diversification benefits. Investors should weigh its high income potential against sector concentration risks and the inherent limitations of a closed-end fund structure.
Henderson High Income Trust plc competes in the crowded UK income fund market, differentiating itself through a strict value-oriented approach and a composite benchmark blending equity and fixed-income exposure. Its competitive advantage lies in its focus on high-quality dividend payers, which can provide downside protection during market downturns. However, its UK-centric portfolio may lag peers with global diversification during periods of domestic underperformance. The trust's closed-end structure allows for long-term investment strategies without redemption pressures, but it also means shares can trade at discounts or premiums to NAV, adding volatility. Compared to open-ended funds, HHI.L offers lower liquidity but potentially higher income stability due to its fixed capital base. Its small size (£300 million market cap) may limit economies of scale in management fees, putting it at a cost disadvantage against larger rivals like City of London Investment Trust or Merchants Trust. Nevertheless, its niche focus on high-income UK equities positions it well for investors seeking concentrated exposure to this segment.