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(Alliance News) - Murray International Trust PLC on Friday declared an increased dividend along with growing net assets in 2019 but underperformed its benchmark.
The investment trust's net asset value total return in 2019 was 12.4% compared to its benchmark which returned 21.1%.
The benchmark is a composite comprising 40% of the FTSE World UK Index and 60% of the FTSE World excluding UK Index. The investment trust said it intends to change its benchmark to the FTSE All World Total Return Index as its current benchmark does not accurately reflect the current composition of its portfolio.
"It is accepted that the constituents of the Reference Index do not closely match those of the company's portfolio and so performance will continue to diverge. Nevertheless this index should resemble the portfolio more closely than the present benchmark, and has the benefit of being a widely recognised and used benchmark or reference index for global equities," Chair Kevin Carter said.
The new benchmark, the FTSE All World, gained 22.3% in 2019.
As at the end of December, Murray International Trust's NAV per share stood at 1,190.0p compared to 1,107.8p at the end of 2018, reflecting an increase of 7.4%.
Net assets grew 8.5% over 2019 to GBP1.54 billion from GBP1.42 billion.
The stock was trading 4.1% lower on Friday at 1,036.00p each, and has fallen 18% from 1,260.0p recorded at the end of 2019.
Murray proposed a final dividend of 17.5p taking the annual dividend payout to 53.5p up 3.9% from 51.5p paid for 2018.
The company said sterling volatility caused by Brexit also periodically hurt the trust but added the the impacts were temporary. It added that double-digit returns were achieved in most geographical regions, including from emerging market bond exposures.
"All major asset classes recorded positive returns despite lack-lustre global economic growth and muted corporate profitability. A third of all global bond yields fell below 0% for the first time in history as deflationary fears squeezed bond prices higher. Three interest rate cuts by the US Federal Reserve paved the way for extremely favourable worldwide liquidity conditions, and asset prices responded accordingly." said Carter.
Looking ahead, the trust's investment manager Bruce Stout, from Aberdeen Asset Managers, said: "Asia and associated emerging markets now progressively capitalise on domestic growth opportunities. Rising real incomes, expanding populations and improving credit affordability support future consumption-based economies becoming even more intra-regionally linked.
"Investment focus will continue to emphasise high-quality, financially-strong companies exposed to such positive trends through a truly, globally diversified portfolio."
He also warned that the spread of coronavirus has resulted in "considerable volatility" in global financial markets. "Whilst volatility and heightened risk-aversion can be a challenging environment, it also represents an opportunity for the investor with a long-term time horizon," Stout added.
In a separate statement, the trust said it has hired Simon Fraser as an independent non-executive director, effective from May 1.
He is currently chair of investment management company McInroy and Wood Ltd. He was previously global chief investment officer of Fidelity International Ltd's European and Institutional business.
"I am delighted to announce that Fraser will be joining the board with a view to becoming chair upon my retirement following the annual general meeting to be held in 2021," Carter said.
By Ife Taiwo; ifetaiwo@alliancenews.com
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