Edinburgh's £1 billion fund manager Bruce Stout has castigated central bankers for their belated response to rising inflation as "woefully inadequate" in the face of rapidly deteriorating economic conditions in the first half of this year.
Writing in his review of the first half performance by abrdn's Murray International Trust, Mr Stout said growth, inflation, corporate profits and living standards all crumbled appreciably amid an "increasingly grudging realisation that there are no easy solutions to issues such as wage inflation, war in Ukraine, wanton interest rate policy, recession risks and the cost of living crisis".
“Continuing lockdowns, supply chain disruptions and widespread shortages combined with upward pressure on wages created a seismic shift in global inflationary dynamics," he said.
"Central banks belatedly began to aggressively raise interest rates, their delusional expectations for just 'temporary' then 'transitory' inflation exposed as woefully inadequate for the negative emerging environment."
READ MORE: Murray International Trust performance ‘a source of disappointment’ to board
Against this backdrop the £1.77bn trust – which invests in global equities with the aim of achieving above-average dividend payments – recorded a net asset value (NAV) total return of 3.8 per cent during the six months to the end of June. That compared to a 10.5% decline on its reference index, the FTSE All World TR.
The share price total return during the period 9.5%, reflecting a narrowing of the discount at which the shares trade relative to the fund's net asset value. Two interim dividends of 12p each have been declared, payable on August 16 and November 18.
Mr Stout added: "For the first time in well over a decade, certainly as regards financial markets, such prevailing pessimism manifested itself in selling into strength rather than buying into weakness.
"Against such a backdrop, capital destruction was likely to be ubiquitous, and so it proved.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel