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(Alliance News) - Murray International Trust PLC on Friday said it underperformed its reference index in the first half of 2020 due to volatility created by the Covid-19 pandemic and added that near-term outlook is "arguably even more problematic than usual".
The trust's net asset value total return, with net income reinvested, for the six months to June 30 fell by 11% compared with a fall of 4.7% for the company's reference index - comprising the return on the FTSE All World TR index from April 27 and prior to that the return from the former benchmark which was a composite of 40% FTSE World UK and 60% FTSE World, excluding UK.
Over the six month period, the share price total return fell by 19%, reflecting a move from trading at a premium of 5.9% to trading at a discount of 3.7%. Shares in the company closed at 966.00p each on Thursday, down 1.2%.
Net asset value per share fell 13% to 1,031.8 pence at June 30 from 1,190.0p at December 31.
The company swung to a first half pretax loss of GBP166.3 million from GBP152 million profit a year ago. Losses on investments amounted to GBP192.7 million versus GBP117.4 million in gains.
"Fixed income yields collapsed across the board, and numerous technology stocks, deemed to be beneficiaries of "social isolation", soared to unparalleled heights. The severity of dividend cuts from companies tackling evaporating revenues and profits has been the deepest on record. For global income funds, the backdrop could scarcely have been more difficult," Murray said.
The company's significant exposure to Asia proved relatively robust with dividends from Asian holdings generally less affected than those in the west. Low exposure to the UK proved insufficient to protect the company's overall capital and income from the region.
The company's defensive exposure to North America delivered in line with expectations in the first half. The portfolio's Latin American exposure has started to recover, but "patience will be required before global confidence towards the region is fully restored".
Murray intends to maintain a progressive dividend policy and currently intends in 2020 at least to match the dividend payout of 53.5p per share in 2019.
By Tapan Panchal; tapanpanchal@alliancenews.com
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