Murray Income’s interim figures, covering the second half of 2014, show the fund delivering a return on net assets of -2.9%, behind the return on the FTSE All-Share Index which was -0.4%. The fund’s rating improved however, reflecting a narrowing of the discount from 3.2% to 1.1%, and so the return to shareholders was -0.7%. The run rate for the fund’s quarterly interim dividends has been set at 7p per share.
Charles Luke’s manager’s report says there were two main areas of negative relative performance. Firstly, the overweight position in the food and drug retailers sector where the holding in Tesco continued to suffer from poor trading in a harsh competitive environment (though it has recovered since). Secondly, the position in the banks sector as Nordea, which succumbed to a bout of profit taking following a strong performance in the prior period, underperformed. Not holding Barclays affected the fund’s performance relative to the index. The weakness of the euro impacted performance of their European holdings. On the plus side, in the technology sector, Sage performed well following the appointment of a new Chief Executive and results that demonstrated improving sales growth. Furthermore, the underweight positions in the large oil companies also aided relative performance.
MUT : Murray Income hurt by Tesco holding