By Jean-Baptiste Andrieux, Reporter, Trustnet, 19 June 2024:
Murray International and JPMorgan Global Growth & Income have built a strong following over the years and are, as such, the two largest investment trusts in the IT Global Equity Income sector.
However, the two trusts built their reputations under very different circumstances.
Murray International is managed by abrdn’s Bruce Stout, who will retire at the end of this month and is being replaced by Martin Connaghan and Samantha Fitzpatrick. Stout made a name for himself during the global financial crisis, when the trust outperformed its peers and the broader market by focusing on high-quality companies and valuations.
Since 2014, however, Murray International’s performance has been subdued, placing it in the bottom quartile of its sector over the past 10 years.
JPMorgan Global Growth & Income has established its reputation through consistency; it has outperformed its benchmark in nine of the past 10 calendar years and is by far the best-performing global equity income investment trust of the past decade. This strength has enabled the trust to absorb several competitors in recent years, such as Scottish Investment Trust, JPMorgan Elect and JPMorgan Multi-Asset Growth & Income, and to issue new shares at a premium.
These contrasting experiences imply a different approach to investing: Murray International operates as a conventional income portfolio, while JPMorgan Global Growth & Income takes a more flexible approach. In the event of an income shortfall, the trust’s capital reserves are used to top up the dividend – a practice that enables JPMorgan to invest in companies with a lower yield but greater prospects for long-term capital growth.
David Johnson, analyst at QuotedData, said: “Because of their different approaches to dividends, JPMorgan Global Growth & Income is able to invest in a much broader range of lower-yielding companies such as tech firms. Therefore, it has been able to offer investors exposure to non-dividend payers while still offering a 4%-ish yield.
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