Murray International Trust to appoint Simon Fraser as next chairman as 2019 results reveal underperformance

Murray International Trust, an investment fund run by Standard Life Aberdeen, has signalled its intention to appoint former Fidelity International investment chief Simon Fraser as its next chairman, following a year of underperformance.

Murray International Trust to appoint Simon Fraser as next chairman as 2019 results reveal underperformance

Bruce Stout, manager of Murray International Trust PLC

Mr Fraser will join the board of Murray International Trust as a non-executive. He is also expected to succeed Kevin Carter as chairman when he steps down from the role at the 2021 annual general meeting.

Murray International Trust’s 2019 results revealed that the company’s net asset value saw a total return of 12.4%, versus the total return of 21.1% from the firm’s benchmark. The share price posted a total return of +16.5%.

2019 is only the fifth out of 16 calendar years the £1.7 billion Trust has underperformed its benchmark since Bruce Stout was appointed manager in June 2004. Between 30 June 2004-31 December 2019, the Trust has produced a share price total return of 510% versus a benchmark return of 202%. Whilst the dividend has more than tripled growing from 15.8p to 53.5p (2018: 51.5p).

Murray International Trust praised Mr Fraser’s “distinguished career” in asset management, including 28 years at Fidelity International where he held the post of global chief investment officer. He recently retired as chairman of F&C Investment Trust and is currently chairman of the Investor Forum, treasurer of The King’s Fund and a trustee of the Abbotsford Trust.

Commenting on the results, Kevin Carter, Chairman of Murray International Trust PLC, said: “Against almost any historical benchmark, 2019 proved to be a remarkable year for financial markets.

“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.

“An unexpected volte-face in monetary policy intentions was performed by some Central Banks fearful of slowing economic growth and persistently low inflation rates. Three interest rate cuts by the US Federal Reserve paved the way for extremely favourable worldwide liquidity conditions, and asset prices responded accordingly. Sterling volatility related to the UK’s protracted European Union divorce periodically impacted the Trust, but such challenges proved temporary.

“Over the period solid double-digit returns were achieved in most geographical regions, including from Emerging Market bond exposures.

“Within most regional benchmark indices, low-yielding technology and growth companies contributed most to positive returns. For the company’s more income focused portfolio this proved challenging in relative performance terms, and not for the first time in recent years. Against a backdrop of escalating positive investor sentiment, a cautious, disciplined approach was increasingly warranted, and in general this delivered satisfactory results.”

Bruce Stout, manager of Murray International Trust PLC, highlighted the impact of the Coronavirus on the fund’s future performance.

He said: “Global financial markets are beginning to exhibit considerable volatility given concerns over the impact of COVID-19. This is a very fluid situation and the board and the manager will remain vigilant and focused on the aims of the company and the investment processes which we adhere to in delivering those aims.

“Whilst volatility and heightened risk aversion can be a challenging environment in which to be a steward of shareholders’ capital, it also represents an opportunity for the investor with a long term time horizon.”

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