Bruce Stout, the manager of Murray International has announced his intention to retire at the of June 2024.
Stout will have spent 20 years at the helm of the abrdn’s global equity income investment trust by the time of his retirement, having served as lead investment manager since 2004.
Under his management, the trust has built a reputation for its focus on defensive businesses which have the capacity to retain both earnings and dividends without overpaying. It has also become one of the AIC’s next generation of dividend heroes, having raised its dividends for 18 years in a row.
In a note, Numis said: “Bruce is one of the stalwarts of the industry and is amongst the longest-serving managers within our universe.
“He built a strong following, particularly with retail investors, for his performance during the global financial crisis when his defensive approach performed relatively well, through a focus on high-quality companies with a focus on valuation.”
Performance of Trust vs sector and benchmark since Bruce Stout’s takeover
Source: FE Analytics
Darius McDermott, managing director at FundCalibre added: “A return of almost 670% over his tenure is something long-term investors should be very happy with. The trust has also delivered on its income mandate, with 18 years of consecutive dividend increases. It currently yields 4.5%.”
Yet, Numis highlighted that the trust’s performance has been more mixed in recent years as the fund has lagged in the growth rally that dominated markets until late 2021.
Data from FE Analytics shows that the trust’s performance has been very variable over time, swinging from top to bottom quartile along the past 10 years.
Source: FE Analytics
A peculiarity that distinguishes Murray International from its IT Global Equity Income peers is its strong exposure to emerging markets. Once added together, global emerging market, Asia Pacific ex-Japan and Middle East & African equities account for 43.7% of the portfolio.
McDermott said: “This initially led to significant outperformance but has become more of a headwind in recent years due to stronger performance in developed markets.
“The trust has picked up again from the beginning of 2022 as rising rates and inflation changed the direction of markets.”
He added that Stout has shown himself to be very flexible in terms of his exposure to fixed income in times when he felt there was not enough value in the equity market.
As for the succession, Martin Connaghan and Samantha Fitzpatrick will manage the trust after Stout’s retirement. They have been working with him since 2001 and were appointed as co-managers of the investment company in 2022.
David Hardie, chair of Murray International, confirmed that Connaghan and Fitzpatrick are taking managerial co-responsibilities with immediate effect and that there would be no change in abrdn’s approach to the investment management of the company going forward.
McDermott said: “The trust has an excellent infrastructure built around it, with Connaghan and Fitzpatrick having worked with Stout since 2001. The trust also has one of the strongest research teams supporting it.
The investment company also published its performance for the first half of 2023 during which the share price total return was down 2.5%. In comparison, the net asset value total return with net income reinvested was up 2.2%.
Performance of trust in H1 2023 vs sector and benchmark
Source: FE Analytics
The company has also declared two interim dividends of 2.4p, the first one payable on 16 August 2023 to shareholders on the register on 7 July 2023 and the second one on 17 November 2023 to shareholders on the register on 6 October 2023.