(Alliance News) - Murray Income Trust PLC on Monday said it outperformed its benchmark in the first half of its financial year, benefiting from a strong performance by UK-oriented mid-cap holdings and underweight positions in struggling blue-chips.
The trust's net asset value return per ordinary share for the six months ended December 31 was 9.0%, while the FTSE All-Share Index total return was 5.5%.
Charles Luke and Iain Pyle of Aberdeen Asset Managers Ltd, Murray Income Trust's investment manager, credited this result to strong performances from its holdings in "domestically-oriented mid cap companies" such as housebuilder Countryside Properties PLC after the revised EU withdrawal agreement was obtained in October and again following the December election result.
Further, Murray Income Trust also benefited from a weaker performance from "some of the largest companies in the market" such as Royal Dutch Shell PLC and HSBC Holdings PLC, where its portfolio is underweight.
Murray Income Trust's net asset value per share on December 31 was 948.4 pence, up from 888.1p on June 30.
In November, the trust said it would be paying per share dividends of 8.25p on December 20, March 20, and June 19 as its first, second, and third dividends. The rate for the fourth interim dividend will be announced in early August and is likely to be paid in September.
Murray Income Trust Chair Neil Rogan noted that "there is still plenty to worry about", including the EU transition period, the US presidential election, and the coronavirus outbreak. Rogan also noted the likelihood of mounting pressure on "companies that are not doing enough" to tackel climate change.
"Irrespective of which way you leaned on Brexit or the UK general election, the removal of political uncertainty is usually positive for stock markets. It is uncertainty that stops companies from committing to new capital expenditure plans, and uncertainty that makes consumers wait before spending. Now that the UK has left the European Union and now that the new UK government has a very strong majority to take it through the next five years, it is likely that many of those spending decisions will be made sooner rather than later," said Rogan.
"Add to this the government's announced commitment to infrastructure and regional spending plus the Bank of England's loose monetary conditions and it is not impossible that we will start to worry about the UK economy overheating before too long. That would be another negative but the journey from here to there would be interesting for investors. Very interesting," he added.
Shares in Murray Income Trust were up 0.7% at 930.00 pence in London on Monday morning.
By Anna Farley; annafarley@alliancenews.com
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Murray Income Trust (MUT)
HSBC Holdings (HSBA)