Coronavirus ii Super 60 update: Murray International

interactive investor's analysts bring you an urgent update on this ii Super 60 rated fund.

The coronavirus outbreak and subsequent pandemic have had a significant impact on the global economy and financial markets. Many share and fund prices have fallen sharply in a very short space of time, as has the cost of oil and other commodities. Volatility has reached levels not seen since the peak of the financial crisis in 2008, and many assets remain prone to sharp movements both up and down.

Given these unprecedented circumstances, with citizens in many of the world’s largest cities confined to their homes, we are collecting updates from managers of funds on the ii Super 60 list of high-conviction active and passive investments.

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Here is the latest from Bruce Stout at Murray International (LSE:MYI), written on 20 March.

“Whilst broad global diversification has been relatively ineffectual in limiting the downside in what only can be describe as the panic phase of the global financial market correction, this follows previous historical patterns. The ensuing scramble for immediate liquidity prompts individual companies to trade a levels significantly out-with the bounds of fundamental valuations.

“Murray International’s portfolio on a net asset value basis has weathered this initial storm relatively well under the circumstances. The emerging market bond portfolio (18%) and large exposure to “defensive” sectors such as Telecoms (16%) have held up well, and Sterling weakness against most portfolio currencies has helped protect capital and provided a welcome tailwind to current overseas revenue translation rates.

“Severe equity market weakness over the past few days has provided the opportunity to divest all short-dated Brazilian Sovereign bonds and selective short-dated Indonesian bonds (all of which have provided extremely defensive contributions of late) and reinvest the proceeds in equities.

“This has been done at levels that provide overall portfolio yield pick-up as money moves from bonds to equities, and further possibilities of such switching are currently being considered.

“The overall portfolio still remains less than 100% geared into equities, although less so than it was at the beginning of the year. The key to further equity invest remains sustainability of corporate dividends, therefore great care and attention must be paid to balance sheets, pay-out ratios and managements previous history of dealing with opaque operating environments. We remain vigilant and proactive to evolving opportunities.”