Strong gains made by a clutch of UK-focused companies following the general election result and Brexit withdrawal deal helped one of Scotland’s oldest investment trusts beat its benchmark over the last six months.
Share price rises of holdings including Countryside Properties, Howden Joinery, Assura and Close Brothers helped the £673m Murray Income Trust deliver total returns of 7.7% for investors compared to the 5.5% gain seen across the market.
The trust, managed by Charles Luke, is also ahead of its benchmark over one, three and five and ten years and has continued to grow its dividend, which has now risen for 46 years in a row.
Chairman Neil Rogan said UK stock selection had been the main contributor to outperformance against a backdrop of continued uncertainty.
But he said the removal of political uncertainty following the recent departure of the UK from the EU and the General Election result “was usually positive for stock markets”.
“It is uncertainty that stops companies from committing to new capital expenditure plans, and uncertainty that makes consumers wait before spending. Now that the UK has left the European Union and now that the new UK Government has a very strong majority to take it through the next five years, it is likely that many of those spending decisions will be made sooner rather than later.
“Add to this the Government’s announced commitment to infrastructure and regional spending plus the Bank of England’s loose monetary conditions and it is not impossible that we will start to worry about the UK economy overheating before too long. That would be another negative but the journey from here to there would be interesting for investors. Very interesting.”