Change in Portfolio Asset Allocation
Murray International Trust PLC
12 January 2000
MURRAY INTERNATIONAL TRUST PLC
------------------------------
Murray International Trust PLC is managed in Glasgow by Murray Johnstone
Limited.
The Board has decided, on the advice of the Manager, to effect a change in the
asset allocation of the portfolio, designed to achieve an improved total
return.
Some years ago the decision was taken substantially to reduce the proportion
of the Trust's assets invested in Japan, and this decision was highly
beneficial in terms of the development of both the income and the capital
account of the Company. As the circumstances have changed, the Manager
recommended in December 1999 that the Company should have an overweight
exposure to Japanese equities.
This is being achieved partly through switching from other markets and partly
through use of the Company's existing multi-currency borrowing facilities. It
is now intended to take advantage of the low interest rates in Japan by
borrowing in Japanese Yen at least to the extent necessary to match the
Japanese equity content of the portfolio. The Board intends to allow the
Manager to increase the Company's gearing to a maximum of 30%. This would
result in a maximum initial exposure to equities of 105%, the balance of the
gearing being matched by the Trust's existing 25% investment in a portfolio of
international fixed interest securities.
It is expected that despite this move into lower yielding Japanese equities
the dividend level of the Company will be at least maintained, although
dividend distributions, and any increases in dividend, over the next 2-3 years
may be funded partly from the very substantial revenue reserves, which
represent some 1.9 times dividend distributions for the year to 31 December
1998.
Following the realignment of the portfolio, the Board intends to change the
Company's benchmark index to a composite of 40% FT/S&P World UK Index, 60%
FT/S&P All World Index excluding the UK. This composite benchmark will
therefore now include Japan with a current weighting of 9.2% and replaces the
current benchmark which excludes Japan.
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