Don’t Back the Wrong Horse

This ad appears in this week’s The Spectator and I don’t want you to be led astray.

I have more than once enthused about Murray International, an excellent investment trust managed by the rather dour Bruce Stout. Murray Income is an investment trust from the same stable but it is, to flog this horse analogy to death, a horse of a different colour.

Murray International first featured here in Yield to Temptation, when it was at a 4% discount to NAV and yielded 6%. Now it trades at a premium of 2% and yields 3.8%. The similarly named Murray Income trades at a discount of 8% and yields 4%. Should you change horses? Certainly not, for two reasons. Murray Income, incidentally about a third of the size of International, has more than 82% invested in the UK. To be fair some of these companies derive their earnings overseas but it looks to me like a closet tracker fund and it charges a higher fee than International. Secondly, it advertises. A good investment rule is never to buy a fund that advertises. The good ones don’t need to.

Now, what else is in The Spectator? Crikey, Old Mutual UK Alpha Fund has taken a full page advertisement. I wouldn’t touch it. “Alpha” is a red light as well as the ad.

Another pretty good rule, at least in London, is to stay at home on Saturday night but I’m making an exception later.