Murray International leaves competition flailing
Bruce Stout’s £1bn portfolio is the stand-out performer in the IT Global Growth sector, but investors will have to pay a premium to get exposure.
With growing attention turning to globally-focussed investments for income, Murray International Trust
offers investors an option with a long track record.
The trust was launched in 1907, and sits in the IT Global Growth and Income
sector, aiming at both capital appreciation and an above average dividend yield.
Data from FE Analytics
shows the fund has returned 357.79 per cent to investors over the past decade. Over five years, a period which includes the market crash of 2008, it has gained 89.04 per cent.
Performance of fund versus sector and benchmark over 10yrs
Source: FE Analytics
Bruce Stout has run the fund since 2004, and he currently has 94.2 per cent in equities and 7.4 per cent in fixed income.
With only 13.4 per cent exposure to UK equities and 1.6 per cent in UK fixed income, the trust offers geographical diversification, with a strong emerging market bias.
The trust is 27.3 per cent invested in Asia Pacific ex Japan, and 20 per cent in Latin America and emerging markets.
Stout’s reputation was strengthened by his handling of the financial crisis in 2008. As a value investor he became deterred by the inflated prices companies were changing hands for and moved into cash.
The portfolio’s max drawdown over the period – the amount you would have lost if you had bought and sold at the worst possible times – is, at 31.16 per cent, the second-lowest in the sector, down from the sector average’s 38.74 per cent.
The dividend, which is paid quarterly, is 3.9 per cent which is around average for a fund in the IMA UK Equity Income
Stout remains bearish about the global economy. In his latest report to investors he wrote: “Despite periodic bouts of unsustainable hope and optimism, investor sentiment remains anchored and hostage to the reality of the developed world’s crisis of public sector indebtedness.”
“The prospects of prolonged anaemic growth and desperately needed de-leveraging keep us cautious on the overall outlook and defensive in portfolio positioning.”
The trust’s strong performance means it’s trading at a premium to NAV of 8.6 per cent – up from 4.93 per cent in March – but Winterflood’s James Brown says that shouldn’t concern investors.
“Aberdeen are constantly issuing shares, they issued £350,000 yesterday and £400,000 the day before, so they’re obviously trying to manage the premium.”
“Bruce has performed really well so there’s strong demand and we don’t think the premium is anything to worry about.”