Trust is to diversify away from concentrated UK sectors after 90% of investors voted to allocate non-UK companies
Investors in the Aberdeen-run £382m Murray Income trust have voted to allow investment in non-UK companies for the first time.
Nearly 90% of votes cast were in favour of the proposition, which allows up to 20% of the portfolio to be in stocks not listed in the UK.
The board and managers say the change will allow the trust to diversify away from concentrated UK sectors.
The investment team plans to use the new allocation to gain exposure principally to European companies and in the short-term expects 5%-10% of the portfolio to shift into non-UK assets.
“There are a number of sectors we think look attractive for the long-term investor in the continental European equity market that are not represented in the UK,” the company says.
“A prime example of this would be industrial gases, which we see as an attractive industry that is highly consolidated with good returns, long term contracted revenues and a truly international presence tied into global industrial production.”
Murray Income’s benchmark will remain the FTSE All Share Index and it will stay within the UK Income & Growth sector.
The company is due to pay an interim dividend of 5.5p on 1 April 2010. Its top five holdings are BP, HSBC, Royal Dutch Shell B, British American Tobacco and Centrica.
Meanwhile, the £166m Aberdeen Asian Smaller Companies enjoyed a 23% rise in NAV, outperforming both benchmarks.
The MSCI Asia Pacific ex Japan Index gained 11.3% while the MSCI Asia Pacific ex
Japan Small Cap Index rose 17.4%, for the six months to 31 January 2010.
Chairman Nigel Cayzer says managers continue to favour conservatively run companies, many of which entered the financial crisis with strong balance sheets.
“They favour long-term investments in simple and sustainable businesses, as opposed to those that are in speculative, volatile or cyclical companies,” he says.
“Given the increasing disposable incomes of Asia’s growing middle class, they look for companies geared to domestic demand.”
Holdings in India and Indonesia were the biggest contributor to the company’s relative return and the portfolio is overweight both markets. The trust has a 13.2% weighting in India and 9.1% in Indonesia.
In contrast, positions in Hong Kong retailers and Malaysian companies lagged, he says.
