The first half of 2012 saw Murray International Trust outpace its benchmark index, while the company's share price premium to net asset value (NAV) per share widened.
The net asset value total return, with net income reinvested, for the six months to June 30th was 6.1% compared with a total return of 4.2% on the trust's benchmark (40% the FTSE World UK and 60% FTSE World excluding UK). Over the six month period the share price rose by 9.6% on a total return basis.
NAV per share at the end of June stood at 925.3p, up 3.7% from 892.2p at the end of 2011. The premium to NAV per ordinary share widened to 6.2% from 2.7% at the end of last year.
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Absolute and relative performance was attributable to a mix of asset allocation and individual stock contributions, the investment company's Chairman, Kevin Carter, said.
The trust is very underweight in North America, which counted against it, despite some Canadian stocks coming up trumps in the period, while being overweight in Latin America proved negative from an asset allocation and currency standpoint, although this was more than offset by strong stock selection.
Significant overweight exposure to Asia contributed positively in terms of both asset allocation and stock selection, while European exposure proved only mildly negative, from an absolute and relative basis. Having relatively low exposure to the UK was positive from an asset allocation basis as the UK market underperformed the composite index over the period.
"Given the enormous weight of monetary stimulus pumped into the global financial system, the lack of economic traction remains of great concern," revealed Carter.
Carter said it looks like the "very heavily indebted, mature, consumption-based economies of the United States, the UK, Europe and Japan" can look forward to a period of "low growth, periods of recession, stagnant labour markets plus contracting overall incomes and living standards for the foreseeable future."
Against this backdrop, securing positive financial returns could prove difficult near term, Carter suggested. "However, widespread portfolio diversification throughout the world continues to give exposure to attractive long term investment opportunities in solid, high quality companies with a proven track record of delivering returns regardless of prevailing economic circumstances," he added.
Return on ordinary activities before tax in the half-year period was £61.26m, of which £33.39m was capital appreciation and £27.86m was revenue. In the corresponding period of 2011, the return was £37.40m (capital: £7.65m; revenue: £29.75m).
JH
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