Interim Management Statement

RNS Number : 6019Y

Henderson Diversified Income Ltd

25 February 2013

 



HENDERSON DIVERSIFIED INCOME LIMITED

25 FEBRUARY 2013

HENDERSON DIVERSIFIED INCOME LIMITED

Interim Management Statement

Review of the period from 1 November 2012 to 31 January 2013

MATERIAL EVENTS OR TRANSACTIONS DURING THE PERIOD

Dividends: a fourth interim dividend of 1.25p per ordinary share in respect of the year ended 31 October 2012, was paid on 31 December 2012 to holders registered on 7 December 2012.

A first interim dividend of 1.25p per ordinary share in respect of the year ended 31 October 2013, was declared on 25 February 2013 and will be paid on 29 March 2013 to holders registered on 8 March 2013.

Share Price:  Over the period the share price increased from 80.2p to 87.4p whilst the share price moved from a discount of -3.7% to a premium of 2.7%

Review: 

Over the three months to 31 January 2013, three month sterling LIBOR decreased marginally to 0.511% from 0.527% whilst three month Euribor rose slightly from 0.197% to 0.232%. This low level is likely to persist given the "lower for longer" central bank policies.  Corporate bond yields have fallen substantially and this has led us to set in progress a reduction in our corporate bond exposure in favour of secured loans in cases where the yields are more attractive. Equities also look attractive relative to corporate bonds so the small allocation to equities is being selectively increased as opportunities arise, up to a maximum of 10%.  Credit markets saw significant capital appreciation in the final quarter of 2012 and we expect a period of consolidation going forward.

Share Issues: On 12 February 2013, 500,000 shares were issued. The proceeds of this issue was £435,000.

There are no other material events or transactions to report.

PERFORMANCE AND FINANCIAL HIGHLIGHTS

Performance to 31 January 2013 (Cum income)

	1 month %	3 months %	3 years %
Share Price Total Return per ordinary share	2.2	10.5	41.0
Net Asset Value Total Return per ordinary share	0.9	3.6	36.0

The Fund was launched in July 2007

Source:   Datastream

Financial Position

	at 31 January 2013	at 31 October 2012
Net assets	£71m	£70m
Net asset value (cum income)	85.1p	83.3p
Ordinary share price	87.4p	80.2p
Premium/(Discount)	2.7%	-3.7%
Total Gearing  (financial and synthetic)	21.9%	24.7%
Target Yield	3 month LIBOR + 1.25%*	3 month LIBOR + 1.25%*
Total Expense Ratio (Source: Henderson fact sheet)	1.46%	1.46%

*3 month £ LIBOR was 0.527% on 31 October 2012 and 0.511% on 31 January 2013

Dividends Paid/Declared in Financial Year to date

	Amount	Pay Date	Record Date
Fourth Interim	1.25p	31 December 2012	7 December 2012
First Interim	1.25p	29 March 2013	8 March 2013

THE PORTFOLIO

Top 10 Investments	Country	% of portfolio	% of portfolio
		at 31 Jan 2013	at 31 Oct 2012
Alliance Boots (secured loan 05/07/2015 term B2)	UK	2.4%	2.5%
Unity Media (9.5% 15/03/2012, 9.625% 01/12/2019, 7.5% 15/03/2019, 5.75% 15/01/2023, 5.125% 21/01/2023)	Germany	2.4%	1.9%
Convatec Heathcare (7.375% 15/12/2017)	Luxembourg	2.3%	2.3%
Smurfit Kappa (7.75% 15/11/2019)	Ireland	2.1%	2.1%
ISS (11% 15/06/2014 and FRN 30/06/2015 Second Lien)	Denmark	2.1%	2.0%
Lavena (secured loan FRN 02/03/2016 term C1 and FRN 10/04/15)	Germany	2.1%	1.9%
Vue entertainment (B FRN 29/11/2017  and Term Loan B)	UK	2.0%	2.1%
RBS Worldpay (secured loan 6/2011 TLA and TLB1)	UK	2.0%	2.1%
Technicolour (FRN 25/04/2016 , TLB1 and TLA1)	France	1.9%	0.8%
William Hill (7.125% 11/11/2016 EMTN)	UK	1.9%	1.9%

Sector Breakdown	% at 31 January 2013	% at 31 October 2012
Secured Loans	50.6	50.7
High Yield Corporate Bonds	29.9	29.7
Investment Grade Bonds	14.7	17.9
Equities	4.3	1.7
Derivatives	0.5	-

The objective of Henderson Diversified Income Limited is to provide Shareholders with a high level of income and capital growth over the long term.

The Company aims to deliver these objectives for Shareholders by investing selectively across the full spectrum of fixed income asset classes including, but not limited to, secured loans, asset-backed securities, investment grade corporate bonds, high yield corporate bonds, unrated bonds, gilts, preference and selective high yield equity shares, hybrid securities, convertible bonds and floating rate notes.

Further information on the Company, including an up to date NAV and share price information, can be found at http://www.hendersondiversifiedincome.com

For further information, please contact:

Jeremy Hamon Company Secretary Telephone: [phone]	James de Sausmarez Director and Head of Investment Trusts Henderson Global Investors Telephone: [phone]
Sarah Gibbons-Cook Investor Relations and PR Manager Henderson Global Investors Telephone: [phone]

Henderson Diversified Income Limited has its registered office at Liberté House, 19-23 La Motte Street, St Helier, Jersey JE2 4SY and it is regulated by the Jersey Financial Services Commission

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

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