Murray International’s 2025: big outperformance, dividend up again, discount gone
Murray International Trust has delivered the sort of year income investors love. Net asset value (NAV) total return came in at 21.9%, the share price total return was an even punchier 36.0%, and the long‑standing discount closed to a 3.0% premium by year end. That comfortably beat the new benchmark’s 12.6% and the UK Retail Price Index’s 4.2%.
The engine room was a genuinely global portfolio that held up in the choppy first half and kept pace as markets hit new highs later in the year. Notably, holdings outside the US and larger weights in Latin America and Asia did a lot of the heavy lifting.
Headline numbers investors care about
| Metric | 2025 | 2024 |
|---|---|---|
| NAV total return | +21.9% | +8.1% |
| Share price total return | +36.0% | +4.5% |
| Benchmark total return | +12.6% | +19.8% |
| NAV per share | 325.4p | 278.4p |
| Share price (mid) | 335.0p | 257.5p |
| Premium/(discount) | 3.0% | -7.5% |
| Dividend per share | 12.4p | 11.8p |
| Dividend cover | 1.12x | 0.98x |
| Dividend yield | 3.7% | 4.6% |
| Revenue return per share | 13.9p | 11.6p |
| Revenue reserves | £85.4m | £74.2m |
| Net gearing | 4.4% | 6.1% |
| Ongoing charges ratio | 0.50% | 0.52% |
| Market capitalisation | £1,977.3m | £1,553.1m |
Dividend Hero status extended to 21 years
The Board proposes a final dividend of 4.6p, taking the total for 2025 to 12.4p per share, up 5.1%. Income was fully covered by earnings at 1.12x and revenue reserves closed the year at £85.4 million. That is exactly what you want to see if you rely on the income stream.
For those planning diaries, the proposed final dividend has an ex‑date of 9 April 2026, a record date of 10 April 2026 and is set to be paid on 18 May 2026, subject to AGM approval. Three interim dividends of 2.6p each have already been paid.
Translation of the jargon: dividend cover is earnings divided by dividends. Above 1.0x means the year’s income met or exceeded the payout. Revenue reserves are retained profits that can support dividends in leaner years. Murray International’s reserves and cover underpin its AIC “Dividend Hero” label.
What drove the outperformance: wide geographic spread, not just Big Tech
An 8.5% outperformance versus the benchmark (before costs) came from both where the Trust invested and the shares it picked. Asset allocation added 5.6% and stock selection added 2.7%, with a further 0.5% from structure such as fixed income, cash and gearing after costs.
Winners across chips, telecoms and staples
- Taiwan Semiconductor Manufacturing Company: revenue rose 31.6% to NT$3.81 trillion as AI and high‑performance computing demand surged. The managers trimmed into strength to keep balance.
- Singapore Telecommunications: underlying net profit up 9% to S$2.47 billion, a bigger share buyback programme and progress in digital infrastructure lifted the shares.
- Broadcom: record US$64 billion of revenue, including US$20 billion from AI, and strong software momentum post‑VMware. Again, position size was reduced on strength.
- Philip Morris International: reduced‑risk and smoke‑free products now around 40% of revenues; the holding remains a cornerstone, but was nudged lower after a strong run.
- British American Tobacco: cash conversion above 95%, a £1.1 billion buyback, and productivity savings expected to exceed £1.2 billion by year end.
Laggards: healthcare and premium spirits felt the squeeze
It was not all plain sailing. Healthcare names Merck and Bristol Myers Squibb, and alcohol producers Diageo and Pernod Ricard, were among the weakest contributors. The managers added on weakness where they see long‑term value, particularly in healthcare and premium spirits, but exited Canadian telecom TELUS as confidence in dividend sustainability waned.
Portfolio moves: trimming winners, adding quality income
Turnover was 18.7%. Strong performers such as TSMC, Broadcom, Philip Morris, Siemens, Enbridge and Zurich Insurance were trimmed. New positions included:
- KONE – global lifts and escalators, benefiting from growing service and modernisation work, yielding 2.9%.
- Inditex – owner of Zara et al, net cash, strong free cash flow and a 2.4% yield with five‑year dividend growth of 37%.
- Lowe’s – US home improvement retailer poised to benefit from an improving housing cycle; introduced by recycling from Broadcom to diversify US consumer exposure.
- Veolia Environnement – global leader in water, waste and energy services with defensive characteristics.
- Grupo Financiero Banorte – Mexican bank with strong profitability and capital, funded by exiting Pemex bonds.
There was also a switch within Singaporean banks, selling OCBC and buying DBS to reduce rate sensitivity and broaden earnings exposure. Fixed income exposure was reduced again, redirecting capital into higher yielding equities.
Discount no more: buybacks, then treasury sales at a premium
The shares moved from a 7.5% discount to a 3.0% premium by December. The Trust bought back 12.9 million shares for £35.1 million at an average 7.9% discount, which added 0.16% to NAV per share and helped smooth volatility. Since the year end, more than 1.5 million shares have been sold from Treasury at a premium, a sensible way to meet demand without diluting NAV.
Quick explainer: investment trusts can trade at a discount or premium to their underlying NAV. Buybacks at a discount support the NAV for remaining holders. Issuance or Treasury sales at a premium are accretive too. Murray International used both tools well.
Costs, gearing and a new benchmark to fit the strategy
Running costs stayed very low with an ongoing charges ratio of 0.50%. Net gearing was modest at 4.4%, funded by fixed‑rate loan notes with a weighted cost of 2.56% and maturities out to 2037. Gearing is borrowing to invest – it can amplify gains and losses, so keeping it measured matters.
From 1 July 2025 the Trust adopted the MSCI ACWI High Dividend Yield Index as its benchmark, replacing the previous reference index. That better reflects the income‑first approach. For longer periods, performance is shown against a blend that includes the prior indices, so you can compare like with like.
Outlook for 2026: opportunities, but stay selective
The Board sees a fragmented, multipolar world continuing to throw up volatility. Rate cuts have begun in the US, but politics and inflation paths remain uncertain. The managers flag three big swing factors: concentrated AI‑driven market leadership, geopolitical flashpoints, and uneven global growth. They remain invested in AI beneficiaries but are consciously managing the size of those exposures.
On the positive side, many companies carry strong balance sheets and cash, and sentiment towards emerging markets is improving with scope for rate cuts and attractive relative valuations. The playbook is unchanged: quality, diversification and disciplined risk management.
My take: why this update matters
- For income hunters: 12.4p of dividends, 21 years of increases, full cover at 1.12x and £85.4 million of revenue reserves are exactly the attributes you want in an income trust.
- For total return investors: a 21.9% NAV total return with contributions from Asia and Latin America shows this is not just a US‑centric story.
- For discount watchers: active use of buybacks helped close the gap. At the latest practicable date after year end, the shares were at a 1.3% premium with NAV at 357.9p and the share price at 362.5p.
- For risk control: low costs, modest gearing and a benchmark aligned with the strategy put the Trust on a clear, consistent footing.
Nothing is risk‑free. The managers themselves call out concentration in AI winners, geopolitical flare‑ups and the chance that policy moves are seen as political rather than economic. But if you want diversified, global equity income with a proven dividend record and credible stock picking, Murray International’s 2025 numbers strengthen the case.
