Murray International Trust delivers 10.5% NAV return but trails its benchmark

Murray International Trust PLC has reported a strong absolute return for the first half of 2026, supported by technology and commodities holdings.

However, there is an important qualification. The trust's net asset value, or NAV, total return of 10.5% fell short of the benchmark's 12.4% return.

NAV represents the value of the trust's assets after liabilities. A total return includes both changes in value and reinvested dividends.

The picture is therefore positive, but not flawless. Shareholders received real capital growth ahead of inflation, interim dividends increased, costs edged lower and demand for the shares remained strong. On the other hand, portfolio income declined and several holdings suffered substantial falls.

Murray International's key half-year figures

Measure	30 June 2026	Comparison
NAV total return	10.5%	Benchmark: 12.4%
Share price total return	9.9%	Not disclosed
NAV per share	351.9p	325.4p at 31 December 2025
Share price	360.5p	335.0p at 31 December 2025
Premium to NAV	2.4%	3.0% at 31 December 2025
First interim dividend	2.8p	2.6p for 2025
Second interim dividend	2.8p	2.6p for 2025
Dividend yield	3.6%	3.7% at 31 December 2025
Ongoing charges ratio	0.47%	0.50% at 31 December 2025
Net gearing	4.0%	4.4% at 31 December 2025
Net assets	£2,094.7 million	£1,921.0 million at 31 December 2025

The trust also outpaced the 3.6% rise in the UK Retail Price Index during the period. Its NAV and share price total returns remain ahead of the benchmark over one and five years, although the precise figures were not disclosed in this announcement.

The full accounts and portfolio commentary are available in the original company announcement.

Technology holdings drove much of the gain

The strongest contributors included Samsung Electronics, BE Semiconductor, Taiwan Semiconductor Manufacturing Company and Cisco Systems.

Samsung's sterling-adjusted share price rose 129%, while BE Semiconductor gained 113%. TSMC advanced 59% and Cisco rose 54%. The manager attributed these gains to demand for artificial intelligence infrastructure, memory chips, advanced semiconductor packaging and networking equipment.

BHP Group was another notable contributor, gaining 36% as copper prices rose and the company increased its focus on the metal.

Importantly, the manager used this strength to take profits rather than allowing successful positions to dominate the portfolio. The trust completely exited BE Semiconductor and reduced Samsung, TSMC, Cisco and Broadcom.

Overall technology exposure was reduced by around 7%. That fits Murray International's income objective, as several of the strongest-performing technology holdings now offered relatively low dividend yields.

The portfolio had some painful detractors

Not every investment worked. CME Group fell 19%, Infosys declined 40%, Ping An Insurance lost 22% and Taylor Wimpey dropped 24% in sterling-adjusted terms.

Infosys faced concerns that artificial intelligence could disrupt traditional labour-intensive IT services. The manager is reassessing the investment case.

Taylor Wimpey was hurt by weak housing demand and rising costs. The holding has been retained because the manager still sees value and an attractive dividend, although it remains one of the smaller positions.

Telkom Indonesia also declined 36%. Its accounting changes, competitive pressures and regulatory uncertainty prompted a review, and the position was sold after the period ended.

These setbacks help explain why a strong 10.5% NAV return still lagged the benchmark. Financials, healthcare and technology all weighed on relative performance, alongside holdings in the UK, Latin America and North America.

Five new holdings reshape the portfolio

Murray International initiated positions in Blackstone, Pfizer, Union Pacific, Fastenal and ONEOK.

The additions broaden exposure across alternative asset management, pharmaceuticals, rail infrastructure, industrial distribution and energy infrastructure. All five are US-listed, although the trust remained materially underweight the US at 15% of the portfolio, compared with 53% for its benchmark.

The manager argues that the US market's lower overall yield makes it difficult to match the benchmark's allocation while generating enough portfolio income to support Murray International's dividend.

The new positions were funded partly by reducing lower-yielding technology holdings and taking profits elsewhere. Portfolio turnover was 12.7% of gross assets during the half year.

Dividend growth is backed by substantial reserves

The first and second interim dividends were both raised from 2.6p to 2.8p per share. Together, they amount to 5.6p for the year so far.

The first payment is due on 14 August 2026, with the second scheduled for 18 November 2026. The board reiterated its commitment to a progressive dividend policy.

Portfolio income nevertheless declined to £49.7 million from £52.3 million in the equivalent period of 2025. Revenue return per share also fell from 7.57p to 7.05p.

That decline is worth monitoring, but the trust has a sizeable cushion. Distributable revenue reserves stood at £84.6 million, equivalent to 1.2 times the dividend paid in respect of 2025. Investment trusts can retain income in stronger years and use those reserves to support distributions when portfolio income is weaker.

The underlying dividend picture was also broadly encouraging. Of 26 companies that had declared full-year intentions, 22 increased their distributions, two cut them and two held them flat.

Strong demand allowed the trust to issue shares

Murray International's shares ended June at a 2.4% premium to NAV. In simple terms, investors were willing to pay slightly more than the underlying portfolio was worth per share.

The trust sold 4.96 million shares from treasury during the period, raising £17.6 million at an average premium of 1.5%. Treasury shares are shares previously held by the company rather than circulating in the market.

Issuing them above NAV helps meet demand and can make a small positive contribution to NAV for existing shareholders. A further 350,000 treasury shares were sold after the period ended.

Costs also moved in the right direction. The ongoing charges ratio fell from 0.50% to 0.47%, while net gearing declined from 4.4% to 4.0%. Gearing means using borrowing to increase investment exposure, which can magnify both gains and losses.

What matters for Murray International shareholders now

This was a respectable half year rather than an outright victory. Murray International generated double-digit NAV growth, raised its interim dividends, beat inflation and maintained unusually strong demand for its shares.

The main concern is relative performance. The trust trailed its benchmark despite benefiting from several spectacular technology gains. Portfolio income was also lower, and more than 90% of assets are denominated in currencies other than sterling, leaving returns exposed to exchange-rate movements.

The manager is responding by trimming expensive, low-yielding winners and redeploying capital into companies offering a combination of income, quality and long-term growth. Whether that discipline improves relative performance without weakening capital growth will be the key issue during the second half of 2026.