Henderson Asia Paciﬁc ex-Japan Enhanced Equity Fund Authorised Corporate Director’s Short Report For the six months ended 30 April 2010 Investment objective and policy Activity The fund aims to provide consistent capital growth During the period the fund returned 19.69%, relative to the FTSE World Asia Pacific ex Japan marginally out-performing its FTSE World Asia Pacific Index (or such other index as may from time to time ex-Japan benchmark which returned 19.66%. replace it) through investing primarily in Asia Pacific ex Japan companies. There are no restrictions on the Alpha performance remains challenging in the size of the companies in which the fund may invest. current environment, with falling volatilities and almost daily reversal in single name ideas. This was The fund aims to provide an annual return above that most obvious at the end of 2009, when the usual of the FTSE World Asia Pacific ex Japan Index, whilst trading slowdown into the Christmas and New Year controlling risk. The fund will invest primarily in Asia period only served to exacerbate this. In contrast Pacific ex Japan companies included within the January was the best month of performance, as FTSE World Asia Pacific ex Japan Index. Additionally, markets experienced their most aggressive fall in the fund can invest in companies listed on other the last twelve months – this briefly pushed volatility exchanges which are associated with FTSE World higher and allowed some relative performance to be Asia Pacific ex Japan Index listed shares or other locked. Unfortunately the latter part of the period Asia Pacific ex Japan companies. saw a return to more benign markets with a slow index level appreciation hurting positions that target The fund will not attempt to replicate identically the volatility. By investment strategy, the stand out share composition of the FTSE World Asia Pacific ex performance was from Event Driven, whilst the Japan Index, and the Fund Manager will actively other three strategies were all slightly negative. review the shares within the portfolio, and effect adjustments as necessary in order to achieve the Within Event Driven the performance has been investment objective. steady over the last five months, although January also saw a couple of single events pushing the The fund may invest the property in transferable performance higher. Most notably value was created securities, money market instruments, derivatives by two separate de-construction stories; firstly the and forward transactions, deposits and units in demerger into two separate operating entities of collective investment schemes. Australian company Macquarie Infrastructure Group, and secondly the conclusion to the asset sale and Risk profile spin-off saga of Hutchison Telecom. The conclusion: This fund invests in the equity securities of Asia to see its last remaining assets acquired by its Pacific ex Japan Companies and has exposure to parent, Hutchison Whampoa. market price, liquidity, foreign exchange and Our Relative Value strategy had a small negative derivative risk which may affect the performance of contribution to performance for the period, driven the fund. There are no restrictions in the size of primarily by the cost of carry of the various derivative companies in which the fund may invest. protection trades within the portfolio. These tend to be long volatility by nature, and have seen losses 2 Henderson Asia Paciﬁc ex-Japan Enhanced Equity Fund arising from both the falling levels of volatility, and offer by BHP for Rio that saw their relative the cost of lost premiums paid to establish the valuations unfairly move to extreme levels. positions. This drain on performance was partially offset by positive returns from both convertible and Given the uncertain economic background we equity holding company positions. There was no one remained cautious in our Liquidity strategy, employing stand-out trades during the period within this book. an enhanced methodology for picking from the universe of possible trades. Unfortunately this has It is fair to say that the Fundamental strategy not yet benefitted performance, reporting a small loss ultimately did little to either enhance or diminish for the period, as the success of IPO’s launched in returns during the period. The strategy has Hong Kong in particular remained surprisingly muted. continued to focus on using sector neutral pairs to generate excess returns, but with sectors often Markets throughout the Asia-Pacific region are moving en masse in the period, and more traditional expected to see a pick up in underlying volatility as fundamentals therefore outweighed by momentum, they continue to predict changes in the underlying individual outperformance at the single stock level global economic health. Whilst this may lead to the was difficult to capture. The best performing delay in some corporate events, we expect the position was the Rio Tinto re-rating relative to BHP increased volatility to more than make up for the in Australia, which has continued for the majority of lost opportunities. the period. This was initiated post the break of the Discrete annual performance 30 Apr 09- 30 Apr 08- 30 Apr 07- 28 Apr 06- 01 Dec 05†- 30 Apr 10 30 Apr 09 30 Apr 08 30 Apr 07 28 Apr 06 % % % % % Henderson Asia Paciﬁc ex Japan Enhanced 51.0 (19.9) 17.7 10.5 7.5 Equity Fund* IMA Asia Paciﬁc ex Japan sector average** 47.9 (20.0) 18.6 11.0 20.0 FTSE World Asia ex Japan Index*** 50.9 (20.7) 17.0 10.8 8.1 Source: Morningstar, Henderson Global Investors & FTSE * Fund returns calculated using close of business prices on a gross asset value basis in GBP ** Sector averages based on sector peer returns using mid-day prices, net revenue and in GBP *** FTSE Custom Developed All World indices are tax adjusted valuations in GBP † Inception date Summary of fund performance Net asset value Net asset value Net asset value 30/04/10 31/10/09 % change Share class p p Class Y accumulation 171.04 143.51 19.18 Class I accumulation 171.38 143.79 19.19 Class Z accumulation 244.16 204.10 19.63 Henderson Asia Paciﬁc ex-Japan Enhanced Equity Fund 3 Funds facts Accounting dates Payment dates 30 April, 31 October 30 June, 31 December Total expense ratio 30/04/10 31/10/09 % % Class Y 0.81 0.81 Class I 0.81 0.81 Class Z 0.06 0.06 The total expense ratio (TER) of a fund is the ratio of the fund’s total operating costs to its average net assets for twelve months. Portfolio turnover rate 30/04/10 31/10/09 % % 61.00 44.00 The portfolio turnover rate (PTR) of a fund is the ratio of the fund’s transactions to its average net assets for twelve months. Net revenue distribution 30/04/10 30/04/09 Share class p p Class Y accumulation 1.32 1.08 Class I accumulation 1.32 1.08 Class I accumulation 2.72 1.93 Dividend distributions amounted to the above for the period under review. Comparative figures are for the same period last year. 4 Henderson Asia Paciﬁc ex-Japan Enhanced Equity Fund Performance record Net revenue Highest price Lowest price per share per share per share Calendar Year p p p Class Y accumulation 2005† – 105.00 99.00 2006 1.83 115.80 97.30 2007 2.36 160.20 111.30 2008 2.78 150.90 78.98 2009 2.69 158.00 85.60 2010 1.32* 175.30# 146.00# Class I accumulation 2006 1.67 116.00 97.40 2007 2.37 160.40 111.40 2008 2.79 151.20 79.14 2009 2.69 158.30 85.80 2010 1.32* 175.60# 146.30# Class Z accumulation 2006 2.79 161.90 135.60 2007 4.39 225.10 155.50 2008 5.04 212.80 111.60 2009 4.77 225.00 121.30 2010 2.72* 250.10# 208.10# † From 1 December to 31 December 2005 * to 30 June # to 30 April Past performance is not a guide to future performance. Henderson Asia Paciﬁc ex-Japan Enhanced Equity Fund 5 Major holdings Major holdings as at 30/04/10 % as at 31/10/09 % BHP Billiton 4.27 BHP Billiton 4.70 Samsung Electronics 4.14 Samsung Electronics 3.85 Commonwealth Bank of Australia 3.09 Commonwealth Bank of Australia 3.10 Westpac Bank 2.78 Westpac Bank 3.03 Australia & New Zealand Bank 2.10 National Australia Bank 2.44 National Australia Bank 2.08 Australia & New Zealand Bank 2.10 Taiwan Semiconductor Manufacturing 1.87 Taiwan Semiconductor Manufacturing 2.06 Hon Hai Precision Industry 1.63 Posco 1.62 Posco 1.44 Hon Hai Precision Industry 1.48 Woolworths 1.17 Sun Hung Kai Properties 1.44 Asset allocation Asset allocation as at 30/04/10 % as at 31/10/09 % Australia 34.84 Australia 37.18 Korea 20.58 Korea 18.86 Taiwan 14.42 Taiwan 14.54 Hong Kong 12.99 Hong Kong 14.03 Singapore 7.23 Singapore 6.77 Fixed income 2.77 China 2.13 China 2.57 Fixed income 1.90 United Kingdom 0.64 New Zealand 0.60 New Zealand 0.56 United Kingdom 0.41 Malaysia 0.36 Cayman Islands 0.20 Derivatives (0.11) Malaysia 0.08 Net other assets 3.15 Derivatives (0.25) Total 100.00 Net other assets 3.55 Total 100.00 6 Henderson Asia Paciﬁc ex-Japan Enhanced Equity Fund Report and financial statements Other information This document is a short report of the Henderson The information in this report is designed to enable Asia Pacific ex-Japan Enhanced Equity Fund for the you to make an informed judgement on the activities six months ended 30 April 2010. of the fund during the period it covers and the results of those activities at the end of the period. Copies of the annual and half yearly long form report and financial statements of this fund are available on Risk warning our website www.henderson.com or contact investor services on the telephone number provided. Please remember that past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. Issued by: Auditor Henderson Investment Funds Limited PricewaterhouseCoopers LLP Registered office: 141 Bothwell Street 201 Bishopsgate, Glasgow G2 7EQ London EC2M 3AE Member of the IMA and authorised and regulated by the Financial Services Authority. Registered in England No 2678531 Depositary The Royal Bank of Scotland plc Trustee & Depositary Services The Broadstone 50 South Gyle Crescent Edinburgh EH12 9UZ Henderson Asia Paciﬁc ex-Japan Enhanced Equity Fund 7 Contact us Customer Services 0800 832 832 Head Office address: www.henderson.com 201 Bishopsgate, London EC2M 3AE Changes of address – regulatory requirements FSA regulation requires us to send this report mailing to the address held on ﬁle on the ex-dividend date of 30 April 2010. If you have conﬁrmed a change of Mr A Sample address with us since that date we will ensure all future correspondence will be sent to your new address. 10 Sample Street Online valuations Sampledistrict You can value your Henderson Funds at any time by logging on to www.henderson.com. Select ‘Personal Investor’ and then access ‘Valuations’ from Sampletown the Tools Menu. Simply select the fund you hold and enter the appropriate number of shares. SM1 2PL Any questions? Further information about the activities and performance of the fund for this and previous periods can be obtained from the Investment Manager. If you have any questions please call our Client Services Team on 0800 832 832 or email firstname.lastname@example.org. Important Information Henderson Global Investors is the name under which Henderson Global Investors Limited (reg. no. 906355), Henderson Fund Management plc (reg. no. 2607112), Henderson Investment Funds Limited (reg. no. 2678531), Henderson Investment Management Limited (reg. no. 1795354), Henderson Alternative Investment Advisor Limited (reg. no. 962757) and Henderson Equity Partners Limited (reg. no. 2606646) (each incorporated and registered in England and Wales with registered office at 201 Bishopsgate, London EC2M 3AE and authorised and regulated by the Financial Services Authority) provide investment products and services. Telephone calls may be recorded and monitored. 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