The manager of the £1 billion Murray Income Trust plc, the fund currently managed by Edinburgh-based investment giant Aberdeen, apologized to shareholders on Friday for the “painful” underperformance of the fund in recent years.
Manager Charles Luke made his remarks as the fund reported net asset value (NAV) total return of 2.7% for the year to June 30, 2025, and share price total return of 4.3% with “both performance numbers disappointing against the 11.2% total return of the FTSE All-Share Index.”
The board of Murray Income Trust announced on July 3 it was commencing a “strategic review of the options available to the company.” On Friday the fund’s chair said it has “received a large number of high quality proposals.”
Murray Income Trust has as its investment objective “the provision of a high and growing income combined with capital growth through investment principally in UK equities.”
For the year ended June 30, 2025, Murray Income Trust’s dividend increased from 38.5p to 40p per share, a rise of 3.9%. This was the fund’s 52nd consecutive year of growing its dividend.
Luke wrote: “To begin with, I should like to express my disappointment and apologise for the relative performance of the portfolio over recent years.
“I have managed the portfolio for almost 19 years now and it has been the honour and privilege of my career to help look after your investments.
“Underperformance is painful for me both emotionally and financially (given the majority of my family’s savings are invested in the shares of the company) but I have continued to buy more shares as I firmly believe that we are on the right path for continued long term success …”
The fund’s biggest holdings at June 30 included Relx, AstraZeneca, National Grid, Unilever, Diageo, TotalEnergies, Convatec, Experian, HSBC, DBS, Sage and SSE.
Luke added: “Changes made to the portfolio during the year reflect the evergreen desire to improve the quality of the portfolio and to concentrate assets in areas where we see the most attractive valuations, as well as the need to raise funds for the company’s buyback of shares.
“The purchases are all companies that to our minds are ‘leaders in their field’ with on occasion issues that we believe to be temporary that have provided an opportunity (in some cases having been on our ‘watchlist’ for years) to add to the portfolio.
“Of note is the appealing valuations of high-quality UK Mid Cap companies which we believe are being mistakenly overlooked by the market.”
Murray Income Trust chair Peter Tait wrote: “Whilst the board acknowledges and appreciates the dedication of the manager and the longstanding tenure of Charlie Luke, this current period of underperformance has already lasted for approaching five years and has been significant in its scale, impacting both the five year and the 10-year relative performance numbers against the benchmark and also against the UK equity indices with a quality focus.
“The persistent underperformance has led to the company trading at a sustained discount to NAV in recent years, despite a significant level of share buybacks. In the light of these challenges, the strategic review was launched.
“The board has received a large number of high quality proposals as part of the review process and we look forward to providing a further update to shareholders in due course.”