Murray International continues to deliver income and growth to long term holders


#1

Murray International has released (MYI.L, -+8.6%) interim results that demonstrated a return to form for the £1.3 billion trust which continues to inv
[See the full post at: Murray International continues to deliver income and growth to long term holders]


#2

I would not buy on a 6.6% premium though I agree that yield seekers might justifiably take a different view. I have however been a long term holder of this and it has served me very well.

I am an enormous supporter of Bruce Stout and fairly enamored with the Aberdeen system which has been successfully applied to different market segments.

Buy on the dips as the newspaper tipsters are want to say.


#3

What is an acceptable premium for an investment trust like this? I find it a bit confusing.

I have only been buying investment trusts in the last few months since I found this website and it seems that all the ones I want for to buy are on a premium.

I didn’t grow up being aware of investment trusts, we don’t have them I believe in Brazil where I was born.

What I am trying to figure out is if I buy some of Murray every month for the next 12, 14 years will that be a bad choice because it is on a premium now?

I have two kids, who have age 2 and 4. I want to pay for their university and to top up my pension maybe with my spare money now.

Any advice would be most gratefully received.


#4

@Paulo, because you are looking to be make monthly contributions over the next 12-14 years, the current premium is less of an issue. In effect, you will be ‘buying less’ when the shares are at a premium, and ‘buying more’ when they are at a discount, so a similar scenario to buying less or more when prices are high or low.

The problems with waiting until there is a discount is that the premium could persist at this level for quite a while, and when a discount does next occur the share price could be higher than it is now. There was a dip in the premium - almost to par - at the beginning of this year, but the last time there was a discount was at the end of 2009: MYI Performance

 

Buying at a premium is likely to be more of a concern for those looking to make a lump sum purchase and whose interest is in the total return. Investors making monthly contributions can have the benefit of pound-cost averaging. Those who are interested in taking the income (such as myself) are likely to be more interested in the dividend record, and the associated data, rather than the premium.

If the current premium is an issue for you then an alternative would be to buy into a similar trust in the meantime, and switch to MYI at a later stage. However, whether there is a realistic alternative will come down to your reasons for choosing MYI in the first place: it isn’t necessarily going to be easy to replicate Bruce Stout’s macro outlook! Plus, you could still end up having the better return by going with MYI from the outset - it’s that the future is an unknown thing again.


#5

@Paulo the advice that @ArkWelder gave you is exactly what my father (who has now very sadly passed away) told me too.

He told me about pound-cost-averaging which basically means that if you are investing monthly then the ups and downs of the price you pay all irons out in the wash.

So yes, I agree, don’t worry about the premium or discount if you are saving monthly and you’re saving for the long term.