The Lemon Fool

What are peoples views on Murray International as more of a diversifier than an income IT?

I see mentions of it but mostly in the HYP context where people hold it for regular income, not that that's a bad thing

Current investments below, ignore the "cash" as this is just what's invested.

This would be an addition of around 5-6% so equivalent to the amount in SMT/SCAM/MWY.

I hold it and am happy to hold it, partly for the income and also it gets me offshore to some extent anyway. The other IT you might look at would be Henderson Far East or has it been discussed already? It is as the name implies, well off shore and makes another good diversifier. I also hold HFEL.

Dod

I hold both MYI and HFEL.

MYI is my joint largest holding, along with Securities Trust of Scotland (STS). Both are global, MYI with a tilt to emerging markets/contrarian style, STS with a tilt to large caps/developed markets. Hence joint largest holdings, providing the large, diversified, global 'base' for all my other holdings.

HFEL comes in at number 4.

Like Dod101 and BrummieDave I too hold Murray International (MYI) and Henderson Far East Income (HFEL). Most of what I own is low yielding, so these two provide a big boost to my income and they offer considerable geographical diversification. MYI holds quite a bit in emerging markets fixed interest and HFEL is my main holding in Chinese companies (mostly banks and utilities; 21% China, 15% Australia, 15% Taiwan, 14% Singapore according to the most recent factsheet).

I'm happy buying single company shares in developed countries such as America and Canada, but when it comes to the likes of China and India I'll delegate this to an investment trust manager.

Based upon its manager's comments in the last few years I'd argue that MYI is slowly turning into itself an asset preserver.

Investment trusts offer an excellent supplement to HYP. HYP restricts itself to a very small part of the world's stockmarkets and in recent years has had a habit of finding companies which fall apart. In contrast a single investment trust offers huge diversification in one investment. It's no surprise to see that, based on some of the comments on TLF, quite a few HYP investors are moving more and more into investment trusts having been burned by chasing high yields.

I too have a fairly large slug of MYI. I see it as cautious global growth & income trust, run by a prudent manager (Bruce Stout). It has less exposure to the US than most Global G&I trusts, and has exposure to Asia Pacific and Latin America along with some fixed interest.

As Salvor Hardin suggests, I too see it as something of a halfway house to an asset preserver. So, yes I would see it as a suitable addition to a cautious portfolio of IT's.

For further diversification you could look at "renewables" or property REIT's, such as: JLEN, TRIG, and RGL or WHR.

Amongst other IT's including those mentioned above, I also hold AAIF, JAI & SOI in the Asia Pacific region, JPGI & HINT in Global G&I sector, and PNL in the "Flexible" wealth preserver sector.

I originally bought it for diversification reasons (in particular the LatAm exposure), but now it’s only the income that causes me to pause when I am about to ditch it.

Over 3, 5 and 10 years it has underperformed its composite benchmark, which is pretty disappointing.

Villa wrote:I originally bought it for diversification reasons (in particular the LatAm exposure), but now it’s only the income that causes me to pause when I am about to ditch it.

Over 3, 5 and 10 years it has underperformed its composite benchmark, which is pretty disappointing.

I hold as part of a basket of ITs, mainly income orientated but including some growth ones.

I see no need to worry about it; as I see it, this is the reason for holding a range of them. In another five or ten years they might well be the strong performers, with other currently strong ones the laggards.

I also have MYI and HFEL.

The former has been said in earlier threads to chase sticks and bark. I am sure, however, that many here, like myself, took MYI home from the pet shop in the full knowledge that its price performance was just a tad unspectacular. There is , however, little competition in the small Global Income IT sector and it does, critically, have a decent dividend and geographic spread. One attraction for me, at this time, is the lowish holding in what is surely a very pricey USA market.

As for HFEL, I have to come clean and admit that I was seduced mainly by the huge dividend. I could argue that it provides a decent exposure to Asian markets but in my case this is confirmation bias. I am sure there are others in the same boat.

All that negativity aside, I am happy with both.

TP2.

Without meaning to go off topic, I note that HFEL (in the Asia Pacific sector) has a higher exposure to China (@ 30%) than most of its peers, apart from JAI @ 37%. For example: in that sector AAIF and SOI hold 8% China.

Decided to top-up Scottish American & Mid Wynd which I already hold.

Sold RM Alternative Income as there is plenty of that kind of exposure in CGT so no point layering up fund & platform fees.

richfool wrote:Without meaning to go off topic, I note that HFEL (in the Asia Pacific sector) has a higher exposure to China (@ 30%) than most of its peers, apart from JAI @ 37%. For example: in that sector AAIF and SOI hold 8% China.

Hi Richfool,
yes, 30% of your holdings in China would be excessive if you only held one IT. Everyone should assess what % that holding is of their total portfolio. In my case it is roughly 0.45% but I do have individual Hong Kong shares amounting to 4.7% plus I do have HSBA which gets most of its profits from HKG and China. So I am not underweight China stocks but not unduly worried.

TP2.

Noted that this thread is about MYI, but as HFEL reared its head a few times, I thought some posters maybe interested in this interview with the HFEL Manager, Mike Kerley:

https://www.dailymail.co.uk/money/inves ... lick#video

Some may want to know that there is a current thread also on Citywire forums (hope okay to mention here) which I contributed to.

Just noting that with its return to a 7% premium I am planning to give this underperforming trust the final heave-ho today.

It was one of my earliest IT holdings bought to give a bit of foreign diversification to my HYP. Although the income has been useful, the 5 year performance has not really given me much cause for enthusiasm, and certainly no reason to persist with ownership at a premium to NAV.

Capital released will probably go into Polar Capital Technology trust and Manchester and London as both stand at a discount and have the FAANG exposure that has rewarded me handsomely in the past. MNL has a particular place in my heart as I bought it on a cracking discount which closed previously... the discount is not at that delicious level today but the holdings are worthwhile in their own right. Happier to hold them than some of the high yield stuff in MYI, anyway.

JoyofBricks8 wrote:Just noting that with its return to a 7% premium I am planning to give this underperforming trust the final heave-ho today.

It was one of my earliest IT holdings bought to give a bit of foreign diversification to my HYP. Although the income has been useful, the 5 year performance has not really given me much cause for enthusiasm, and certainly no reason to persist with ownership at a premium to NAV.

Capital released will probably go into Polar Capital Technology trust and Manchester and London as both stand at a discount and have the FAANG exposure that has rewarded me handsomely in the past. MNL has a particular place in my heart as I bought it on a cracking discount which closed previously... the discount is not at that delicious level today but the holdings are worthwhile in their own right. Happier to hold them than some of the high yield stuff in MYI, anyway.

Interesting: MYI is at a premium despite having performed poorly, you say. That's the opposite of what we normally expect. Good luck with the changes - they could well pay off, though discount sometimes take a long time to close.

Arborbridge wrote:

JoyofBricks8 wrote:Just noting that with its return to a 7% premium I am planning to give this underperforming trust the final heave-ho today.

It was one of my earliest IT holdings bought to give a bit of foreign diversification to my HYP. Although the income has been useful, the 5 year performance has not really given me much cause for enthusiasm, and certainly no reason to persist with ownership at a premium to NAV.

Capital released will probably go into Polar Capital Technology trust and Manchester and London as both stand at a discount and have the FAANG exposure that has rewarded me handsomely in the past. MNL has a particular place in my heart as I bought it on a cracking discount which closed previously... the discount is not at that delicious level today but the holdings are worthwhile in their own right. Happier to hold them than some of the high yield stuff in MYI, anyway.

Interesting: MYI is at a premium despite having performed poorly, you say. That's the opposite of what we normally expect. Good luck with the changes - they could well pay off, though discount sometimes take a long time to close.

JOB, It needs to be understood that MYI is a cautiously managed global G&I trust, with an above average dividend yield. Because of his cautious and defensive stance the manager, Bruce Stout, has generally maintained a low exposure to the US and focused more on Emerging Markets and Asia Pacific. He also holds some fixed interest. Thus MYI's past (capital) performance has been below its peers. I understand he has a loyal following of investors who favour his more defensive positioning, arguably more towards being something of a capital preserver than its peers, and thus I suspect the reason behind its premium to NAV despite its weaker capital growth. Perhaps a trust to invest in if one anticipates a market correction.

It would be very unfair/inappropriate to compare it to any sort of technology trust, which I appreciate you weren't doing.

Disc: I have a large holding in MYI.

Hi richfool,

I generally keep a beady eye on the discounts or premium to NAV: if I find myself holding an IT at a significant premium over 5% it needs to be something really special to justify my keeping it in preference to say, buying a pounds worth of equity for 90p due to a discount elsewhere. Over time selling at a premium and buying the discounts seem to be working quite favourably for me.

JoyofBricks8 wrote:Just noting that with its return to a 7% premium I am planning to give this underperforming trust the final heave-ho today.

It was one of my earliest IT holdings bought to give a bit of foreign diversification to my HYP. Although the income has been useful, the 5 year performance has not really given me much cause for enthusiasm, and certainly no reason to persist with ownership at a premium to NAV.

Funnily enough I did the same thing last week. I'd held this for a number of years without paying too much attention to it. Upon doing an audit of some of my IT holdings I saw both the poor returns and the premium, and dumped it putting the return in a global tracker.

I am rationalising my holdings anyway as I have too many, and am no longer willing to carry passengers. If I would not buy it today, and I would not, it goes.

richfool wrote: I understand he has a loyal following of investors who favour his more defensive positioning, arguably more towards being something of a capital preserver than its peers, and thus I suspect the reason behind its premium to NAV despite its weaker capital growth. Perhaps a trust to invest in if one anticipates a market correction.

Now that's the bit that puzzles me. Over the past 5 years it has significantly failed to be a capital preserver, with large falls in 14/15 and 17/18.
I cannot understand its popularity.

I did drop a small amount < 1.5% into this of the total I have invested.

I must admit it's one where I'm thinking "Why did I actually do that?" and I'm struggling to answer it which is, perhaps, a hint.

This is still more or less accurate before the new money went into MYI and a similar amount into BGS.

1 CAPITAL GEARING TRUST 30.4% [N/A]
2 PERSONAL ASSETS TRUST 13.3% [N/A]
3 RUFFER INVESTMENT CO 12.7% [N/A]
4 Fundsmith Equity Class I 10.2% Global
5 Lindsell Train Global Equity Class D 9.8% Global
6 SCOTTISH AMERICAN INVESTMENT CO 7.8% [N/A]
7 SCOTTISH MORTGAGE INVESTMENT TST 7.5% [N/A]
8 MID WYND INTL INVESTMENT TRUST 7.4% [N/A]
9 Cash 0.8% [N/A]