Murray Global leans toward emerging markets

Managers of the Murray Global Return are angling the £207m trust towards emerging market economies.

The latest interim results for the company, managed by Bruce Stout, reads: “At this juncture, some of the cheapest markets in the world relative to growth prospects remain in the developing world, thus Murray Global Return will continue to focus on emphasising high quality companies within them.”

The report is less optimistic about developed markets. It says the economic recovery is likely to remain fragile into the first half of 2004: “With the current business cycle clearly in its infancy and still over-dependent on credit, it is vital that economic activity broadens out to include manufacturing, business investment and job growth if recent momentum is to be maintained.”

It goes on: “The prevailing climate of high debt and low savings, suggesting impediments to growth, remain entrenched in the developed economies, obstacles that could still prove restrictive to growth if the recent back-up in bond yields continues.”

Explaining the trust’s performance in the six months to the end of November, the report says Stout maintained a cyclical stance first adopted earlier in the year: “This involved keeping a high weighting to industrial companies in Europe and a positive asset allocation towards Asia and emerging market equities. The portfolio remained totally unexposed to the US market, where valuations were deemed too expensive relative to the underlying rate of corporate profit growth, and exposure to the US market was reduced in favour of growth opportunities elsewhere.”

Over the period, the net asset value total return from the units was 20.1%. At November 30 the net asset value was 15.7p per ordinary share and 143.6p per zero dividend preference share.