Investment trust Murray International (MYI), part of the Aberdeen Asset Management stable, delivered a solid set of half year results on 15 August, cementing itself in the eyes of investors as delivering income and long-term capital growth.
Over the six months to 30 June, the company delivered an NAV (net asset value) total return of 6% and a share price total return of 11.6% compared to just a 1% increase in the benchmark the FTSE All World index (although note that from 1 July the benchmark changed to the MSCI ACWI High Dividend Yield index).
The trust also declared two dividend distributions for the period of 2.6p per share each and said it remained ‘committed to a progressive dividend policy.’
This commitment to growing the dividend has earned the trust recognition from the AIC (Association of Investment Companies) as a ‘Dividend Hero’, having raised its total payout in 2024 by 2.6% to 11.8p for a 20th consecutive year.
WHAT’S IN THE PORTFOLIO?
Managed by Martin Connaghan and Samantha Fitzpatrick, after the departure of long-serving manager Bruce Stout in June 2024, the fully diversified global portfolio of around 50 companies avoids ambitiously-valued growth stocks and focuses on cash-generative firms with durable business models, strong management teams and ESG (Environmental Social and Governance) credentials.
This globally diversified strategy has historically helped the trust navigate periods of volatility, maintaining consistency in income and returns.
Connaghan told Shares the Aberdeen team reviews stocks on a daily ongoing basis due to the global nature of its portfolio, taking into consideration macro, geopolitical risk, company earnings and news flow.
Fitzpatrick explained there was always a danger of being too reactive when it comes to reviewing a portfolio, and due to the tumult in the first half of the year there was a great deal of discussion among the team, but in the end turnover of assets was just 8.3% which was in line with other periods.
‘Most of our conversations didn’t result in immediate action. We paused and took a view on what it might mean for companies. The last thing to do is to have a knee-jerk reaction,’ adds the manager.
The pair have moved away from investing in the so-called ‘Magnificent Seven’ but are not shy of technology or chip-focused stocks, with Broadcom (AVGO:NASDAQ) and TSMC (2330:TPE) among their top 10 holdings.
Mel Jenner, analyst at research firm Edison, says of the duo: ‘While the managers invest for the long-term, sharp moves in stock prices [during the first half of 2025] provided several opportunities; during the first half of 2025, there were three new purchases and seven complete disposals, along with a selection of top-ups and top-slicing of portfolio holdings.
‘Connaghan and Fitzpatrick are mindful of the macroeconomic background but are fully focused on bottom-up stock selection, seeking good businesses at good prices across the globe.’
The sector diversification across the portfolio emerged in the key drivers of performance, which included international tobacco company Philip Morris International (PMI:NYSE), global exchange group Hong Kong Exchanges and Clearing (0388:HKG),Central American airport operator, Grupo ASUR (ASURB:BMV), Asian communication services business Singapore Telecommunications (Z74:SGX) and European utility company Enel (ENEL:BIT) as the top five best-performing stocks.
Despite the success stories, co-manager Fitzpatrick told Shares there were stock-specific challenges in the first half of the year.
A couple of alcohol producers, Diageo (DGE) and French spirits company Pernod Ricard (RI:EPA) were ‘in the eye of the storm of tariff uncertainty’ along with two healthcare stocks the trust owns, Merck (MRK:NYSE) and Bristol Myers Squibb (BMY:NYSE).
‘Healthcare stocks by their nature are largely resilient, however after the Liberation Day announcement and subsequent worries about price changes, some of our healthcare stocks suffered tariff uncertainty.’
WHAT IS NEXT FOR THE TRUST?
As for new portfolio additions, the co-managers have bought shares in Indian IT service company Infosys (INFY:NSE) and Italian financial services group Intesa Sanpaolo (ISP:BIT).
‘Intesa Sanpaolo is well capitalised and is the number one bank in Italy. And although Infosys has had a bumpy ride this year, revenue growth has been great over the past five years and the company provides a different type of IT exposure in our portfolio,’ says Connaghan.
Looking forward, Fitzpatrick sees the biggest threat to the trust’s performance being the possible threat to income from an extreme event, such as it experienced during the Covid years when companies struggled to pay out dividends or went into ‘panic mode’ and withheld dividends.
But lessons have been learned, Fitzpatrick says reassuringly. ‘We have a fantastic safety net. Over the bumper years the trust has squirreled away cash for exactly that type of pandemic scenario or another type of scenario, like currency fluctuations. The trust has over a year’s worth of income reserves to dip into to maintain a steady dividend to our shareholders.’
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
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