Recent events have been a reminder than even the most carefully considered assumptions can be upended by events. Conflict in the Middle East, a redrawing of the tariff regime and uncertainty around which business models are most at threat because of AI adoption have disrupted interest rates, energy prices and economic growth projections.

Fund managers cannot hope to shape their portfolios around this noise – it is too unpredictable and changeable. In this type of environment, we have three main defences: stock selection, diversification and income. These three lodestars kept Murray International on track in 2025 and continue to be its focus in 2026.

All three factors played a role in the trust’s consistent performance last year, but diversification proved particularly important. It was a year in which markets discovered that there was a world beyond the US technology sector and broadened their horizons. The S&P 500 returned 17.9%, though the weakness of the Dollar brought the return to UK investors down to just 9.8%.

Growth opportunities outside the US

There were far better returns available elsewhere. In Latin America, for example, our holdings delivered a return of 36%, our Asian equity holdings rose 32%, while our European listed companies rose 22%. This was aided by the market finally noticing that there was growth outside the US, and often at far cheaper prices. This diversification really came into its own during periods of significant volatility such as last April’s liberation day sell off and subsequent recovery.

There was greater sector diversification as well. As investors fretted about whether the US technology giants were spending too much on AI infrastructure, but also which sectors might be disrupted by it, other areas performed well. Over the course of 2025, our performance came from a breadth of sectors, including industrials, utilities, materials and telecoms. The top 10 performers included technology groups such as TSMC, Broadcom and Samsung, but these sat alongside telecoms groups such as Singtel, ‘old economy’ companies such as Philip Morris and BAT, and industrial names such as Grupo ASUR and Siemens.

It was a similar picture for income generation. We were not reliant on any single sector for dividends with banks, natural resources companies and industrials all contributing to the income performance over the year. We believe this is important for dividend stability over time.

Income strength

At times of crisis, when capital values are volatile, dividends can be a reassuring source of consistent return. This is a core part of Murray International’s investment objective. The trust is an AIC Dividend Hero and has grown its payouts to shareholders for more than 20 years in a row. 2025 was no exception, with the dividend growing 5.1%.

Growth can be found in unexpected places

Diversification and income generation are powerful drivers of returns, but at the heart of Murray International is the companies we choose. Last year, we were careful in our exposure to the growth of AI. It is an exciting trend, but valuations and expectations had started to look stretched in some areas. We chose to invest through companies such as TSMC, the world’s largest contract chipmaker. It delivered exceptional performance in 2025, as AI development drove demand for high-performance computing. We also held Broadcom, where AI revenues jumped 65% over the year. Both holdings were trimmed following strong share price performance, along with Samsung Electronics and BE Semiconductor.

2025 was also a strong year for some traditional industries, such as tobacco. Philip Morris is using its traditional tobacco operations to support its transition into reduced risk and smoke-free products. These now represent 40% of revenues. BAT also saw its smokeless portfolio grow, reaching 18% of group revenues. They showed that growth can be found in unexpected places.

Concentrating on the factors we can control

These are unusual times. Yet there are some aspects of the current environment that suit us. For example, investors are placing a greater focus on companies with tangible assets and visible cash flow. These are exactly the type of companies we like. The outlook for dividends remains robust and having a global remit and flexible allocation is a real advantage. We are not constrained by benchmark weightings in individual companies, or in certain sectors and as such, are not struggling to find dividend opportunities.

The world is fluid, and it is easy to be distracted by news flow. There are concerns about which parts of the market may be weakened by AI, the vulnerability of certain sectors to oil-price shocks, and the impact of tariffs. Many of these outcomes can only ever be a ‘best guess’ and we prefer to direct shareholder capital with greater degrees of certainty where possible.

Our focus will continue to be on quality, diversification and disciplined risk management as markets navigate these conflicting signals. We will continue to concentrate on the factors we can control – challenging portfolio holdings, scrutinising positioning, while maintaining a long-term perspective. Bouts of weakness can bring opportunities that support our objectives: growing income alongside long-term capital growth.

Important information

Investment objective

Other important information:

Companies selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance.

The Murray International Trust Key Information Document can be obtained here.

Issued by abrdn Fund Managers Limited, registered in England and Wales (740118) at 280 Bishopsgate, London EC2M 4AG. The company is authorised and regulated by the Financial Conduct Authority in the UK.

Discrete performance (%)

(A) Including current year revenue.
(B) Since 30 June 2025 the benchmark index of the Company has been the MSCI ACWI High Dividend Yield in GBP. Prior to that date, the reference index was the FTSE All-World Index in GBP.

Dividend yield data table