Murray International (MYI ) has delivered its 20th consecutive year of dividend growth, according to its latest annual report. 

Over 2024, the £1.6bn global equity income trust delivered net asset value (NAV) returns of 8.1%, while shareholders were up 4.5%, including dividends. 

Although returns trailed the nearly 20% generated by its FTSE All World benchmark, achieving the milestone of two decades of progressive payouts – and with it the coveted ‘dividend hero’ status – was a boost for the board and fund managers Martin Connaghan and Samantha Fitzpatrick.

The report also marks the first set of annual results since long-time lead manager Bruce Stout retired last June. 

Dividend success

Murray’s mission statement is to achieve an above-average dividend yield with long-term growth in dividends and capital ahead of inflation, principally through investing in global equities.

The trust declared a final dividend for the year of 4.3p per share, which represents an annual distribution of 11.8p per share – an increase of 2.6% on the previous financial year. 

The total payout represents a 4.4% yield based on today’s share price. 

The consistent growth of dividends issued means the trust now qualifies as a ‘dividend hero’.

According to the Association of Investment Companies, Murray joins a list of 19 other investment trusts that have increased their dividends for 20 or more years in a row. 

New accolades aside, Fitzpatrick believes there is always room for improvement in terms of dividend growth. She told Citywire the trust had to dip slightly into its reserves last year to secure the dividend rise and would be focusing in 2025 on securing a wholly covered dividend. 

Fitzpatrick and Connaghan have worked on the trust’s management team since 2019 and 2017, respectively, but clearly took on more responsibility after Stout stepped down. 

Low exposure to US tech

In Numis analyst Ewan Lovett-Turner’s view, the trust’s underperformance against the benchmark was driven primarily by ‘a lack of exposure to mega-cap US tech and an overweight to Latin America’. 

According to the results, Murray is the only UK global equity income trust portfolio with no exposure to the Magnificent Seven, due largely to its dividend-oriented strategy and concerns about high valuations. 

The trust is not anti-US tech. Its strongest contributor to performance last year (rising 114% and contributing 2.75% to NAV performance) was Broadcom, a California-headquartered semiconductor and infrastructure software producer.

However, strong regional diversification remains a focus of the trust despite it having been a big hindrance to recent returns. 

Commenting on the plans for the future, Fitzpatrick told Citywire: ‘These results will help to calm any lingering concerns we’re going to do something radical in terms of how we look at companies and investment objectives. 

‘Stocks will change, every individual has a different take on stocks, but in terms of what we’re trying to achieve, keeping the trust well diversified remains important. We’re proud of having a well-diversified global trust – that is the purest way to balance risk’. 

North America gave the strongest regional returns, returning 28.1% over the year, while Latin American exposure fell by almost as much (-26.3%). Mining exposures to iron ore and lithium with Vale in Brazil and SQM in Chile disappointed as those commodity prices fell.

At a headline level, the trust is massively overweight Latin America, with an 8.6% allocation versus the benchmark’s 0.8%. Meanwhile, its 34.2% exposure to North America is barely half the index’s 67.1%.

The managers noted South American holdings had still ‘delivered attractive returns over the long term’.

The next best-performing country exposure was the UK, which delivered a 17.1% total return thanks to strong share price performance from consumer staple holdings such as British American Tobacco and Unilever. 

Asia also witnessed strong equity market returns driven by Taiwan, Singapore, Thailand and Hong Kong, achieving a 13.7% total return. 

Ping An Insurance, a Chinese financial services group, did particularly well, with the Chinese market starting to recover from a challenging couple of years on expectations that recent stimulus measures will revive the country’s economy. 

From Taiwan, top holding TSMC had another strong year, as did contract manufacturing specialist Hon Hai Precision Industries.

Thai-based bank SCB X, Singapore banking group Oversea-Chinese Banking Corporation and leading communication provider Singtel were also among the portfolio’s best performers. 

European equity markets were more subdued, with losses from French energy company TotalEnergies and BE Semiconductor in the Netherlands weighing on performance.

While the trust has outperformed slightly over three years, shareholder returns of 62.6% for the five years to 11 March are behind the 84.3% for the MSCI AC World, another global index, according to Deutsche Numis data.