Profile: Murray International (MYI)
Aberdeen’s Bruce Stout, who manages the trust, had established himself as one of the top-performing global investors, but performance in recent years had been lacklustre. Principally, this was down to Mr Stout’s fondness for companies in emerging markets, which saw a significant slowdown in 2014 and 2015.
However, Mr Stout describes himself as a “natural contrarian”, and says that there will be times when his views are out of favour. This year the trust has been back with a vengeance and has resumed its place at the top of the performance tables. The weakness boosted the dividend yield, which now sits at 4.1%. Equally, it reduced the trust’s chunky premium, making it look better value for investors.
The portfolio still has a distinctly emerging market flavor: 28% is in Asia ex Japan equities, while another 25% is in emerging market equities. For Mr Stout, this is where the long-term growth in the global economy resides. However, in many cases these are companies with which investors will be familiar – Unilever Indonesia, for example.
Stout uses the ample resources from within Aberdeen Asset Management, calling on the company’s global 'buy' list, compiled by specialist analysts. He is also very much a proponent of the wider Aberdeen ‘buy-and-hold’ philosophy, looking to hold companies for the long term. The trust has an annual management charge of 0.5%.
The general term for the rate of income from an investment expressed as an annual percentage and based on its current market value. For example, if a corporate bond or gilt originally sold at £100 par value with a coupon of 10% is bought for £100 then the coupon and the yield are the same at 10%, or £10. But if an investor buys the bond for £125, its coupon is still 10% (or £10) and the investor receives £10 but as the investor bought the bond for £125 (not £100) the yield on the investment is 8%.
An interchangeable term for shares (UK) or stocks (US). Holders of equity shares in a company are entitled to the earnings and assets of a company after all the prior charges and demands on the company’s capital (chiefly its debts and liabilities) have been settled. To have equity in any asset is to own a piece of it, so holders of shares in a company effectively own a piece proportionate to the number of shares they hold. (See also Shares).
If you own shares in a company, you’re entitled to a slice of the profits and these are paid as dividends on top of any capital growth in the shares’ value. The amount of the dividend is down to the board of directors (who can decide not to pay a dividend and reinvest any profits in the company) and they will be paid twice yearly (announced at the AGM and six months later as an interim). Dividends are always declared as a sum of money rather than a percentage of the share’s price. Although dividends automatically receive a 10% tax credit from HM Revenue & Customs (HMRC), which takes the company having already paid corporation tax on its profits into account. Dividends are classed as income and, as such, are liable for personal taxation and so shareholders have to declare them to HMRC.
Annual management charge
If you put money in an investment or pension fund, you’ll not only pay a fee when you initially invest (see Allocation Rate) but also a fee every year based on a percentage of the money the fund manages on your behalf. Known as the AMC, the actual percentage varies according to the particular fund, but the industry average for active managed funds is 1.5%.
Generic, loosely-defined term for markets in a newly industrialised or Third World country that is in the process of moving from a closed economy to an open market economy while building accountability within the system. The World Bank recognises 28 countries as emerging markets, including Argentina, Brazil, China, Czech Republic, Egypt, India, Israel, Morocco, Russia and Venezuela. Because these countries carry additional political, economic and currency risks, investors in emerging markets should accept volatile returns. There is potential to make large profit at the risk of large losses.