Murray International (MYI) £12.70

Gain to date: 4.4%

We added Murray International (MYI) to the Great Ideas portfolio at £12.16 on 7 July 2022 in the hope veteran fund manager Bruce Stout’s experience and the trust’s diversified exposure would be prized in the current environment.

So far, we’ve been vindicated as the trust has continued to outperform its closest peers and the wider market.

WHAT’S HAPPENED SINCE WE SAID TO BUY?

The shares are only modestly higher on our entry point but that compares favourably to an MSCI World index down around 4% over the same timeframe.

Investment bank Stifel noted on 25 October that ‘over the past year, performance has benefited from the trust avoiding growth stocks and instead having a focus on defensive income type companies.’

The trust is comfortably the best performer in the Association of Investment Companies’ Global Equity Income sector with a one-year share price total return of 17.4% against an average of just 4.5%. The worst performer is Majedie Investments (MAJE), down more than 20%.

Murray’s largest holding, at 5.2% of total assets, is Mexican airport operator Grupo Aeroportuario del Sureste (ASURB:BMV) which recently beat expectations with third quarter numbers. Earnings per share and revenue were 3.1% and 3.2% ahead of analysts’ estimates respectively as the company benefited from a strong recovery in air traffic in the wake of the pandemic.

WHAT SHOULD INVESTORS DO NOW?

We continue to see a place for Murray International in investors’ portfolio as we rate Stout’s abilities to manage the trust effectively and think its strong dividend growth credentials are of value in the face of inflationary pressures.

The stock is currently trading at a 2% discount to net asset value, which is roughly in the middle of a range for the last 12 months, identified by Stifel, which has run from a 6% discount to a 2% premium. On this basis investors should keep buying the shares.

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