Murray International misses benchmark; Alliance rises
Bruce Stout: volatility will remain for some time
Murray International Trust posted a 12.4% rise in net asset value and the share price posted a total return up 16.5%.
However, last year was only the fifth out of 16 calendar years the £1.7 billion trust has underperformed its benchmark since Bruce Stout was appointed manager in June 2004.
Between 30 June 2004-31 December 2019 the trust has produced a share price total return of 510% versus a benchmark return of 202%. Whilst the dividend has more than tripled growing from 15.8p to 53.5p (2018: 51.5p).
An investment of £10,000 at the time Mr Stout was appointed manager would have produced a return of £61,000.
Kevin Carter, chairman, said: “Against almost any historical benchmark, 2019 proved to be a remarkable year for financial markets. All major asset classes recorded positive returns despite lack-lustre global economic growth and muted corporate profitability.
“A third of all global bond yields fell below 0% for the first time in history as deflationary fears squeezed bond prices higher.
“At the time of writing global stock markets are experiencing very significant volatility as a degree of panic related to COVID-19 has swept across the investment world. Time will tell whether this reaction is fully justified, too limited, or excessive. These matters can only be judged in retrospect and during their occurrence investors are usually wise to remain both watchful and humble.”
Mr Stout, added: “Having the courage and conviction to align thoughts and actions without compromise demands strength and resilience.
“Limited options, rising inequality, expectant financial markets and ageing demographics present a toxic combination unlikely to be painlessly resolved. Some hard truths desperately need addressing.
“Global financial markets are beginning to exhibit considerable volatility given concerns over the impact of COVID-19. This is a very fluid situation and the board and the Manager will remain vigilant and focused on the aims of the Company and the investment processes which we adhere to in delivering those aims.
“Whilst volatility and heightened risk aversion can be a challenging environment in which to be a steward of shareholders’ capital, it also represents an opportunity for the investor with a long term time horizon.”
Murray International Trust is proposing an annual dividend of 53.5p per share, against 51.5p last year, which includes a recommended final dividend of 17.5p, up from 17p.
Simon Fraser, the recently retired chairman of F&C Investment Trust, will be joining the board after the forthcoming AGM on 1 May, with a view to becoming chairman next year.
The board has also appointed BDO to replace EY as auditor.
The Dundee money manager recorded a strong uptick in NAV per share and even better returns for investors in share price terms after narrowing its discount.
Gregor Stewart, chairman, commented: “2019 was a good year for the Trust; it outperformed its benchmark and many of our peers, despite political and macroeconomic headwinds. We have increased the dividend for the 53rd consecutive year, raising it by 3.0%.
“In 2019, our total shareholder return was 24.3% and our NAV total return was 23.1%, versus 21.7% for our benchmark, the MSCI ACWI and a median return of 22.4% for our peers.
“Our investment strategy has also performed well since WTW was appointed in April 2017, delivering a total shareholder return of 28.9% and a NAV Total Return of 27.1% versus 25.5% for the MSCI ACWI.
“During 2019, we completed the simplification of the Trust by selling our subsidiary, Alliance Trust Savings, and virtually all our remaining non-core assets.
“As a result, we are now fully focused on global equities, something the board has been working towards for the last four years.
“We expect the gtrust’s new streamlined structure to lead to continued improvement in returns to shareholders, making us an attractive core holding for generations of investors for many years to come.”