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15 March 2017

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Oliver Phillips

Written by:
Oliver Phillips
Chief Executive

Stocks in Focus: Murray International

This week I am looking at Murray International, an investment trust that recently released its full year results for the year to 31 December 2016. The fund aims to achieve capital growth while also providing an above average dividend yield, predominantly through investment in worldwide equities.

Murray’s 2016 results were very positive and its total return performance was in the top 25% for Global Equity Income funds during the year. Sterling weakness was cited as being a key factor for the strong performance, as the fund has relatively low exposure to the UK economy while being significantly overweight in the Asia Pacific and Latin America regions. Successful stock selection and asset allocation was also a large contributor to the outperformance.

The manager, Bruce Stout, has focussed the fund towards emerging markets, as this is where he sees the most growth potential alongside attractive valuations. Mr Stout has also reduced the gearing in the fund by 30% by clearing a Yen denominated loan on the back of this strong performance, with all remaining debt now drawn in sterling.    

After a couple of years of underperformance due to high weightings in Asia and Latin America/Emerging Markets, Mr Stout has this year been rewarded for sticking to his process. This fund offers investors a different approach to income investing and provides diversification against the traditional UK and Global income funds. Bruce Stout’s conviction in his methods has been beneficial to recent performance and highlights the need to take a long-term view when investing.  The investment trust historically has not traded at a wide discount to NAV and is currently at a 1% discount; in line with its 12 month average.  Despite its narrower discount it does offer a 4.1% yield, which is noticeably higher than most globally invested funds.

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