Henderson High Income Trust: 5.5% yield explained - One2One Investor Forum

Henderson High Income Trust Portfolio Manager David Smith talked with Proactive at the One2One Investor forum about the investment trust's strategy for generating sustainable income, delivering long-term capital growth and identifying opportunities in UK equities. Smith outlined how a diversified portfolio of UK shares and bonds supports the trust's income objectives, with a current dividend yield of approximately 5.5%.

Smith explained that the trust, established in 1989, focuses on dividend sustainability rather than simply targeting the highest-yielding stocks. The investment approach prioritises financially strong companies with attractive valuations, resilient cash flows and the potential to grow dividends over time.

The portfolio manager highlighted the benefits of combining equities with fixed-income investments, with bonds currently accounting for approximately 12% of the portfolio. He explained how the trust uses fixed-rate borrowing to invest in bonds offering higher yields, supporting income generation and diversification.

Smith also discussed the trust's record of increasing its dividend for 14 consecutive years, alongside its approach to managing gearing and maintaining income resilience during periods of market volatility.

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