I would say that until last year, manager, Bruce Stout had done an excellent job since taking over the reins for over a decade. The trust has become one of the most consistent global income trusts under his stewardship. Prior to 2013, it had outperformed its benchmark in each of the previous 11 consecutive years. According to figures from the Association of Investment Companies, £1,000 invested over the past 10 years would have produced a total return of £3,180. With one or two exceptions, the dividend has grown or been held in each of the past 40 years. Dividend growth over the past 5 years is 6.3% p.a.
Murray International (MYI) has today reported results for the full year to 31 December 2014 (link via Investegate).
For a second consecutive year, the trust has not managed to outperform its benchmark. The share price total return for the year was just 1.7% compared to 7.5% for the benchmark - comprising 40% of the FTSE World UK Index and 60% of the FTSE World ex-UK Index.
Some of the reasons for the underperformance are an underweight position in USA which returned 20% last year, a reduction in the premium to NAV, currency exchange headwinds and an increase in weighting to fixed income securities.
Whilst NAV per share has fallen over the past year, the management charges to Aberdeen have increased 6.2% to £7.2m (2013 £6.8m). Total charges represent 0.76% of net assets including transaction costs.
Despite this years underperformance, Stout sees no reason to change his defensive approach "Certain maxims exist globally irrespective of country, creed or culture. Oil and water don't mix; foundations built on sand don't last; pouring petrol on fire won't extinguish flames. Applying such logical thought and common sense to the financial world, it would be reasonable to assume borrowing more money won't reduce debt. Self-evident, perhaps, but seemingly beyond comprehension for central bank policymakers. Complicit with relentlessly layering more debt on top of existing debt in a futile attempt to solve the chronic global debt crisis, their actions remain beyond contempt. Unfortunately such practice continued to dominate recent global economic policy"… and…