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The objective is to outperform a specific benchmark from an equities portfolio split roughly 40% on value stocks and 60% on stocks likely to provide long-term capital appreciation. The fund will invest at least two-thirds of its total assets in Asian equity securities and equity instruments offering prospects for above-average dividend yields.
According to the firm, the fact that Asian dividend yields are higher than North American and European firms was one of the main reasons behind launching this fund. In addition, Henderson Global Investors also believes that AsiaÆs aging population will increase the demand for income-bearing securities.
While the fundÆs universe consists of around 3,000 stocks in the region, the final portfolio will only comprise of long-only positions in Asian companies with substantial earnings and dividend streams. The basket will also be selected on the basis on bottom-up techniques, which will eliminate country or sector biases.
Within the actual basket, around 10% of the Asian Dividend Income Fund will be invested in Singapore, with companies such as DBS, UOB, Singapore Press Holdings and Singapore Telecom in the mix.
But the fundÆs scope is regional. The top holding at present is Taiwan Semiconductor Manufacturing Corporation, with 3% of the total portfolio. The top 10 holdings also include other stocks with high dividend yields such as Hang Seng Bank and AustraliaÆs Telstra, as well as industrials such as Cement Industries of Malaysia and TaiwanÆs U-Ming Marine Transport Corporation.
Benchmarked to the MSCI All Countries Asia Pacific ex-Japan index, the fund will target dividend yields of around 4% to 5% per annum. As of 28 February of this year, the fund had already outperformed its benchmark, posting a positive return of 17.4% against the aforementioned index, which has returned 13.1% since October 2006.
The fundÆs minimum initial investments have been capped by Henderson Global Investors at $2,500, while subsequent investments carry a floor of $500. The fees for investing are set at 1.2% per annum of net asset value.
It will be distributed to retail investors and through an array of consumer and private banks in Singapore. The fund itself will be managed by Mike Kerly, a London-based fund manager for Henderson Global Investors.
The Asian Dividend Income Fund is the latest Henderson Horizon Fund to be available in Singapore. Including the latest fund, Henderson offers six US dollar-denominated funds to Singapore investors. It has also made four euro-denominated funds to investors in this market.
HendersonÆs new fund is also the second Singapore-based launch in the past 12 months. In March 2006, the firm rolled out its Asia Pacific Property Equities Fund with the philosophy of gaining long term capital appreciation by investing at least 75% of its total assets in the quoted equity securities of companies or real-estate investment trusts (or its equivalents) in Asia.
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