Global equity income trust Murray International (LON:MYI) delivered another robust performance in the six months to June. The fund generated a positive net asset value (NAV) total return of 10.5%.
Admittedly, performance lagged the 12.4% delivered by the MSCI ACWI High Dividend Yield Index. However, Sharesify views this is as a respectable result for a value-oriented trust during a period dominated by the AI trade.
Robust H1 performance
Managed by Samantha Fitzpatrick and Martin Connaghan, Murray International is a global equity income trust that seeks to generate long term growth in dividends and capital ahead of inflation.
During H1, the fund’s investments in the UK, Latin America and North America proved the principal regional detractors to relative performance. At the sector level, Financials, Health Care and Technology weighed on returns relative to the benchmark.
Notable winners included Samsung Electronics (KRX:005930), BE Semiconductor (AMS:BESI), TSMC (TPE:2330) and Cisco Systems (NASDAQ:CSCO). During H1, some of the best-performing semiconductor names were sold as valuations became harder to justify.
Murray International’s commodities holdings also benefitted from AI-related demand. BHP Group (LON:BHP) proved a standout performer as it repositioned itself as a premier copper play.
Sitting tight
The main detractors included CME Group (NASDAQ:CME), Infosys (NSE:INFY) and Taylor Wimpey (LON:TW.). Shares in Taylor Wimpey struggled as the homebuilding sector faced persistent economic pressures and new legal uncertainties.
While the housebuilder has been disappointing thus far, the managers believe Taylor Wimpey offers good value and an attractive dividend. They are ‘prepared to sit tight with Taylor Wimpey for now, although it will remain one of the smaller holdings within the portfolio’.
New purchases
During H1, Murray International initiated new positions in alternative asset manager Blackstone (NYSE:BX) and US pharmaceutical giant Pfizer (NYSE:PFE).
The managers also bought railroad company Union Pacific (NYSE:UNP) and Fastenal (NASDAQ:FAST), America’s biggest fastener distributor.
Virginia Holmes, Murray International’s chair, commented: ‘Given the company’s robust, disciplined portfolio approach, the board is very confident of the company’s ability to continue to deliver shareholder value, with long-term growth in dividends and capital ahead of inflation.’
Underperformance versus the benchmark in H1 is mildly disappointing. Yet we think Murray International’s managers should be applauded for delivering another period of robust absolute returns.
As one analyst argued: ‘With markets increasingly concentrated in a handful of AI winners, the portfolio’s diversified, valuation-conscious approach should offer greater resilience if markets broaden or sentiment towards expensive technology stocks cools.’
An AIC ‘Dividend Hero’, Murray International generated real capital growth ahead of the rate of UK inflation, thereby meeting one of its key objectives. Investors should also note that the NAV total return and share price total return remain ahead of the benchmark over one and five years.
Learn more about Murray International here: https://www.aberdeeninvestments.com/en-gb/myi
