Henderson Far East Income Yield Holds Above 9% With Dividends Still Rising

Henderson Far East Income‘s yield and its record of annual dividend growth are drawing fresh attention to HFEL, the Asia-Pacific investment trust sitting in the FTSE 250. The trust currently pays quarterly dividends that add up to a 9.6% yield, and it has been raising its dividend per share each year for several years running.

What the latest numbers show for Henderson Far East Income’s yield

The most recent full-year figures, drawn from the Henderson Far East Income annual report for the year ended 31 August 2024, show net assets of £366m and a NAV per ordinary share of 221.97p. Total dividends declared for that year were 24.60p per share, up from 24.20p the prior year. On the trust’s own alternative-performance-measure basis, the dividend yield at 31 August 2024 was 10.8%, calculated against the then share price of 227.00p. The 9.6% figure cited more recently reflects a different share price reference point.

The dividend cadence has continued into the current financial year. The trust declared two interim dividends of 6.25p each for the year ending 31 August 2026, representing an increase of 0.8%. The second of those was formally confirmed on 14 April 2026 via an announcement to the London Stock Exchange. Alongside that, income from investments rose 90.8% year-on-year for the half-year period, with income from option writing up 19.0%, according to the trust’s half-year report.

Option writing is worth noting here. HFEL uses a covered-call programme alongside its equity holdings to supplement income, which helps sustain the headline yield without relying solely on dividends from portfolio companies.

The portfolio: semiconductors, property, and the Asia-Pacific growth thesis

As set out in the FCA-registered factsheet, HFEL’s formal investment objective is to provide shareholders with a growing total annual dividend per share, as well as capital appreciation, from a diversified Asia-Pacific portfolio focused on cash-flow-generative companies with the ability to sustain and grow dividends. In practice, that produces some concentrated positions.

The three largest holdings at the time of writing are MediaTek, Taiwan Semiconductor Manufacturing and SK Hynix, all in semiconductors. That concentration in a single theme gives the trust meaningful upside exposure to AI-driven chip demand, but it also creates a clear single-sector risk. A correction in semiconductor valuations would hit the portfolio on both the capital and income side.

HFEL also holds dividend-paying property and conglomerate names. Swire Properties, yielding 5.7%, is one example of the kind of cash-generative holding that anchors the income side of the portfolio even when growth stocks are not producing much in the way of dividends.

The share price history is less flattering than the dividend record. Over five years, HFEL is down 19%, which raises a legitimate question about the sustainability of the income if the capital base continues to erode. Over the past year the picture is better: the trust has gained 15%, ahead of the FTSE 250’s 9% return over the same period. Whether that marks a genuine recovery or a cyclical bounce will depend partly on what happens to Asian economic momentum.

Weakening economic indicators in several large Asian economies add another layer of risk. A broad slowdown could compress dividend capacity across the portfolio at the same time as it weighs on asset prices. Diageo’s decision to cut its dividend in half this year, after decades of unbroken annual increases, is a useful reminder that income histories never carry an unconditional guarantee forward.

The offsetting argument is structural. Asia-Pacific’s long-run growth story, AI infrastructure build-out, and the region’s generally under-owned status in UK investor portfolios all support a case for holding exposure here. HFEL’s mandate to grow the dividend annually gives management a clear discipline, and the 90.8% jump in investment income in the latest half-year suggests the portfolio’s cash generation has improved materially.

The next test is whether the second half of the 2026 financial year sustains that income momentum, and whether the interim dividend trajectory points to full-year dividends above 25p per share for the first time.