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Murray International's returns hit by US and Japan underweights
by James Phillipps on Aug 22, 2013 at 00:01
Murray International lagged its benchmark in the first half of the year with performance hit by an overweight position in Brazil and being underweight the US and Japan.
In its half year results, the trust, managed by Bruce Stout (pictured), said its 9.3% net asset value (NAV) return was below the benchmark’s 12.4% rise, although its share price rise of 9% meant that its premium narrowed slightly.
The trust said that its fixed income exposure also proved a drag on returns although it did not cause any losses.
Despite issuing £330 million of new shares in the first half, Murray International continues to trade on a significant premium to NAV, which currently stands at 9.4%, the highest in the AIC Global Growth & Income sector.
Chairman Kevin Carter said the raising of new funds at a premium to the share price helped enhance NAV and improved liquidity. He added that the trust will consider further issuances at a premium, but listing rules restrict to raising a maximum of 10% of its outstanding equity in any 12 month period.
Separately, he said that in June the trust negotiated a new £120 million loan facility with Royal Bank of Scotland, which it has drawn down in two tranches and the interest payable on these tranches, repayable in four and five years, is 2.21% and 2.575%, respectively. The trust ended the first half with net gearing of 12.2%.
Carter warned that the Alternative Investment Fund Managers Directive (AIFMD) will have ‘significant consequences’ for the trust, increasing compliance and regulatory costs, although it has not yet finalised the ‘exact details’ of this.
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