US equities and other dollar-based assets significantly influenced returns from composite benchmarks during the period, masking to some extent an extremely difficult period for global equity markets, according to the trust’s board.
Stout, manager of the investment trust and senior investment manager on the global equities team at Aberdeen, made a negative asset allocation call on North America during the period, with a large underweight position.
And yet he still managed to return 6.1% in the six months to 30 June compared to 4.2% from his benchmark (40% the Ftse World UK and 60% Ftse World ex UK).
Other asset allocation calls saw Stout take an overweight in Latin America, which proved negative on the market and currency level but was offset by strong stock selection.
Meanwhile, a significant overweight position in Asia contributed positively in terms of both asset allocation and stock selection.
The board of the trust said Stout’s relatively low exposure to the UK was positive from an asset allocation basis as the UK market underperformed the composite index over the period.
Premium widens
Over the six-month period the share price of Stout’s trust rose by 9.6%, widening the premium investors have to pay to access his investment prowess from 2.7% at the end of December to 6.2% at the end of June.
Against a backdrop of deteriorating sentiment towards the debt-laden developed world and the enormous weight of monetary stimulus pumped into the global financial system, the board of Murray International said the lack or economic traction remains of great concern.
“This suggests low growth, periods of recession and stagnant labour markets. Against this backdrop, securing positive financial returns could prove difficult near term,” the board said.
“However, widespread portfolio diversification throughout the world continues to give exposure to attractive long term investment opportunities in solid, high quality companies with a proven track record of delivering returns regardless of prevailing economic circumstances,” it added.
