Murray Income Trust (LSE: MUT)

Last close As at 04/11/2024

GBP8.27

−3.00 (−0.36%)

Market capitalisation

GBP849m

Murray Income Trust (MUT) aims to provide a high and growing income combined with capital growth, through investment in a portfolio principally of UK equities. MUT focuses on companies that have potential for real earnings and dividend growth, while also providing an above-average portfolio yield. The emphasis is on the management of risk and the portfolio’s absolute return. MUT measures its performance versus the broad UK stock market.

Equity Proposition

Murray Income Trust (MUT) celebrated its 100th anniversary in 2023. It is managed by Charles Luke and Iain Pyle of abrdn.

Below we highlight four things investors need to know about MUT.

1. A 50-year track record of consistently rising dividends looks set to continue.

The dividend has increased by around 1.9% per annum on average over the last 10 years, and usually implies a dividend yield of over 4%. The board has confirmed its intention to maintain annual dividend increases, as ‘a priority for the future’.

2. The trust’s portfolio is well diversified by sector and income source.

MUT invests in high-quality, mainly UK-listed stocks across a range of sectors, and it has scope to invest up to 20% of gross assets in overseas-listed companies. As a result, MUT owns some of the world’s leading companies, with strong long-term growth forecasts, including Microsoft, Novo Nordisk and Mastercard. These foreign holdings have been performing well so the managers have increased portfolio exposure to them. The trust’s income sources are also diversified. 80% of portfolio income is sourced from abroad, which provides protection from any deterioration in the UK economy. In addition, MUT’s option writing programme provides a further modest, uncorrelated supplement to portfolio revenues.

3. Long-term performance has outpaced the UK market.

MUT returned an annual average of 5.8% in NAV terms over the five years ended 30 June 2024 versus an average benchmark gain of 5.5%. The trust returned a respectable 10.0% on an NAV basis over the year to 30 June 2024, although this lagged the benchmark return of 12.8% due to the trust’s quality bias, as value stocks (typically lower on quality metrics) have outperformed in the UK.

4. MUT’s managers are upbeat about the future.

The UK general election has reduced political uncertainty and, with growth increasing, inflation easing and interest rates set to fall, MUT’s managers are positive on the near-term outlook. Looking further ahead, the trust has exposure to what the managers believe to be some ‘unstoppable long-term trends’, such as ageing populations, digital transformation and the transition to renewable energy. The managers expect these should provide tailwinds to earnings, dividend growth and MUT’s performance over the medium term. The managers also argue that the case for UK equities is compelling and will eventually tempt investors to return, as they view the market as ‘very cheap’ compared to its own history and relative to global markets.

Latest Insights

View More

Investment Companies | podcast

Uncovering Trusts – Murray Income Trust (MUT)

Investment Companies | Update

Murray Income Trust — Delivering income and capital growth

Investment Companies | Update

Murray Income Trust — In a celebratory mood

Investment Companies | Update

Murray Income Trust — Milestones marked by a return to form

Equity Analyst

Joanne Collins

Joanne Collins

Analyst, Investment Trusts

Key Management

  • Charles Luke

    Fund manager

Share Price Performance

Price Performance
% 1M 3M 12M
Actual (2.7) (5.6) 2.9
Relative (1.4) (5.5) (7.3)
52 week high/low 899.0p/799.0p

Overview

Murray Income Trust (MUT) invests in high-quality, mainly UK-listed stocks. It has achieved both its dividend and capital growth objectives over the long term. The trust boasts 50 years of continually rising dividends. It paid a dividend of 37.5p per share in FY23 (ended 30 June 2023 (FY22: 36.0p)), and the board has indicated the dividend will rise to at least 38.0p in FY24. This represents a prospective yield of 4.5%. Late last year the company decided to take action to allow shareholders to access dividend income more quickly and more evenly throughout the year, by smoothing quarterly dividend payments. MUT has also delivered absolute gains and outperformance of the market and most of its peers over the longer term, returning an annual average of 6.1% in NAV terms over the 10 years ended 31 March 2024, versus an average market gain of 5.8% pa. The trust’s managers view UK equities as very attractively priced at current levels and expect the portfolio’s quality holdings to outperform as and when UK stocks return to favour with investors.

Research

Update

Investment Companies

Murray Income Trust — Milestones marked by a return to form

Update

Investment Companies

Murray Income Trust — Attractive income at a discount

Update

Investment Companies

Murray Income Trust — Attractive income and long-term outperformance

Review

Investment Companies

Murray Income Trust — A happy anniversary for shareholders

Review

Investment Companies

Murray Income Trust — Maintaining a commitment to quality and income

edison tv

Investment Companies

Chairman’s insight: Murray Income Trust

Thematics

thematic

Investment Companies

Vietnam Holding – Vietnam in the global digital race

thematic

Investment Companies

US small-cap equities – Time to shine?

thematic

Investment Companies

Emerging markets – Worthy of consideration

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free