Bruce Stout, manager of Murray International Trust

Announcing its interim results, the company revealed that two interim dividends of 12.0p (2019: 12.0p) have been declared in respect of the period to 30 June 2020.

The first interim dividend is payable to shareholders today and the second interim dividend will be paid on 19 November 2020 to shareholders on the register on 2 October 2020. 

The results also revealed that Murray International Trust’s net asset value (NAV) total return, with net income reinvested, for the six months to 30 June 2020 fell by 10.7% compared with a fall of 4.7% for the Company’s Reference Index (comprising the return on the FTSE All World TR Index from 27 April 2020 and prior to that the return from the former benchmark which was a composite of 40% FTSE World UK and 60% FTSE World ex UK).

Over the six month period, the share price total return fell by 18.7%, reflecting a move from trading at a premium of 5.9% to trading at a discount of 3.7%.

Last year was only the fifth out of 16 calendar years the £1.5 billion Trust underperformed its benchmark since Bruce Stout was appointed manager in June 2004.

Between 30 June 2004-30 June 2020 the Trust has produced a share price total return of 394% versus a benchmark return of 343%. Whilst the dividend has more than tripled growing from 15.8p to 53.5p.

Kevin Carter, Chairman of Murray International Trust, said: “Against the fluctuating backdrop of clinical, political and economic events, proffering a credible near-term outlook is arguably even more problematic than usual. Without greater clarity on how the pandemic evolves and ultimately impacts health and recovery trajectories throughout the world, most forecasts are merely speculative.

“The longer-term implications for the global economy, capital markets, future dividends, and even normal day to day living, are also largely unknowns at this stage. However, some potential financial consequences must be considered now ahead of events. Current widespread economic contractions will likely produce credit defaults, bond rating downgrades, equity capital raisings, on-going profit warnings and dividend cuts.

“The manager’s investment approach seeks companies which offer stable long-term earnings and dividend growth prospects in combination with management teams focused on shareholders’ interests. During the adversity of the last six months opportunities have been taken to reallocate assets from defensive fixed income holdings into equities with these long-term earnings and dividend growth characteristics, all within the diversified global nature of the company’s portfolio. Such repositioning increases confidence in the delivery of the long term income and growth investment objectives of the company.”

Bruce Stout, manager of Murray International Trust, added: “Markets are likely to remain volatile for the duration of the year. Expectations are for every major economy to contract, contending with slower growth, record low bond yields and companies struggling to achieve meaningful earnings growth, in the short term. 

“The exit from lockdown will not be smooth and will be subject to periods of reversal. Portfolio diversification has increasingly proved an unpopular and underwhelming strategy in an investment world with a seemingly insatiable appetite for the ‘Internet of Things’. However, as pandemic fears ease and the reality of redemptive policy actions become quantifiable, the risk/reward between portfolio concentration and portfolio diversification appears poised to rotate favourably towards the latter.”