Building a portfolio of international shares is important to diversify your holdings away from UK large caps which have performed poorly over the past 20 years, when compared to some international indices.
The use of an investment trust can be an excellent way to do this and the Murray International Trust has a lot going for it at the moment.
The release of Murray International Trust’s half-year report on Friday reinforces the attractiveness of the trust as a solid choice for diversified overseas exposure offering both income and growth.
In the most recent half-year period, the Murray International Trust’s share price movement and NAV progress have created an opportunity for investors.
As of 31st December 2022 the trust traded at a 3.1% premium, this slipped to a 1.5% discount at the end of June 2023 and the discount is now 4.8%.
The quality of the underlying portfolio does not deserve a 4.8% discount and notwithstanding underlying volatility in the portfolio companies, one would expect this discount to return to a premium over time.
The point must be stressed that this is an international trust with a diversified portfolio of high-quality international shares with reliable cash flows. It is not an emerging markets trust.
In terms of geographical breakdown, 26.6% is allocated to North America, 25.5% to Europe ex UK and 24.8% allocated in Asia Pacific ex Japan. The UK makes up 3.4% of the trust.
The largest holding is US-based semiconductor manufacturer Broadcom Corporation followed closely by Aeroporto del Sureste, the Mexcian airport operator. Taiwan Semiconductor Manufacturing is a top ten holding as is Unilever.
The trust provides considered exposure to emerging markets including China and India, two important sources of growth. Latin America makes up 13% of the trust.
The growth prospects of the trust’s portfolio are credible but investors should not overlook the substantial dividend.
With a yield of 4.58%, the Murray International Trust is a solid dividend payer and will not be out of place in any income portfolio.