By Jean-Baptiste Andrieux, Reporter, Trustnet, 18 August 2023:
After 20 years at the helm of the trust, Bruce Stout, manager of Murray International has announced he will retire in June 2024.
During his tenure spanning two decades, Stout has given the trust a very particular flavour that includes a significant underweight to US equities and a sizeable allocation to emerging markets, which make it stand apart among the peers in the IT Global Equity Income sector.
The chair of the investment company, David Hardie, has already confirmed that Stout’s successors, Martin Connaghan and Samantha Fitzpatrick will keep the same investment approach and experts have shown confidence in their abilities to steer the wheel…
Rather than the succession, long-term performance and portfolio construction are the areas that caused experts the most concerns.
The trust had a difficult time in the past decade, in a period that did not favour value investing. It is the second worst performer over 10 years in the IT Global Equity Income sector, albeit some improvements over shorter periods, with the trust moving to the sector’s first quartile over three years.
Andrew Courtney, analyst at QuotedData, highlighted the uniqueness of the trust in terms of geographic and sector allocation. While equity income funds often pick stocks in the oil and gas, chemicals and healthcare sectors, Murray International taps into themes such as industrial automation, semiconductors and digital communications.
While acknowledging that this allocation may lead to volatile but considerable upside over the long-term, Courtney warned that this differentiated approach can be detrimental if the investment thesis does not play out.
He said: “I think the structure of the fund is admirable. However, investors should be aware that its portfolio is radically different from the index.
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