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Murray International Trust
Investment trust
As the name suggests, this trust offers an international portfolio of UK and global equities, as well as some bonds. The manager may invest anywhere in the world and in any sectors, with a focus on maintaining an above-average yield for investors.
Our opinion
This is a genuinely international portfolio. Aberdeen Standard Investments is well-known for its global equity research capabilities and Bruce makes full use of the resources available to him. Overall, his style has meant that returns have been very strong in some years and weaker in others, but he has delivered in the long run. As a result, this trust may suit investors who have a long-term investment horizon and are looking for income and growth from global markets.
Trust manager
Aberdeen Standard Investments (ASI) is a brand of the combined investment businesses of Aberdeen Asset Management and Standard Life Investments. The merger of these two businesses was completed in August 2017 to achieve operational economies of scale, and the group now boasts 1,000+ investment staff in more than 50 locations across Europe, the Americas, Asia and beyond.
Bruce Stout is a senior investment manager on the global equities team and has managed the trust since 2004. Bruce joined Aberdeen in 1987 via the acquisition of Murray Johnstone. He has held a number of roles within ASI, including as an emerging markets fund manager. He is assisted on the fund by head of global equities, Stephen Docherty, who joined Aberdeen in 1994. Prior to this, Stephen worked for Abbey National Plc in the department of actuarial services within the life division.
Investment board
The board comprises six members and is headed by Kevin Carter as chairperson. He is a former CEO of Old Mutual Asset Managers in the UK and the United States and has extensive experience of board memberships for investment trusts and pension schemes. The other board members have a vast array of legal, business and investment management experience and include Clare Binyon, Peter Dunscombe, David Hardie, Marcia Campbell and Alexandra Mackesy. The board meets six times per year, and the company year-end is December 31.
Investment process
The assets are invested in a diversified portfolio of international equities and fixed income securities spread across a range of industries and economies. Although Bruce has the final say, in general ASI’s investment style is very much a team effort. At the heart of the process is well-disciplined stock research. Bruce, in effect, has two mandates: to protect his investors’ money and grow it over the long term, and to provide above-average income. He prefers simple businesses that have a strong ability to produce surplus cash and a resilient business model. These could be in any industry. He is also prepared to invest anywhere in the world he sees value with the trust’s investment process giving him a buylist of around 900 stocks to choose from. His investment horizon when selecting stocks is at least five years. There are no limits regarding geographic or sector exposure, but a maximum 15%, at the time of investment, is allowed in a single holding.
Risk
This is a relatively focused portfolio of no more than around fifty stocks, so stock selection risk is higher than in trusts that invest in more companies. Currency is another factor that needs to be considered, as the manager does invest globally. However, Bruce is a seasoned investor and ASI’s rigorous process and well-resourced team do go a long way to mitigate these risks.
Gearing
The board believes the judicious use of gearing can enhance returns to the shareholders. Any borrowing (except in the short-term for liquidity purposes) is used for investment purposes or share buybacks. The board sets the level of gearing and continuously monitors that level to ensure it remains within authorised limits. Normally, the gearing will not exceed 30% of the trust’s net asset value. The company had net gearing of 12.5% at December 31, 2018.
Read more about this fund
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