THE chairman of the £1.74 billion Murray International Trust has flagged the challenges of re-establishing “some form of economic orthodoxy” amid growing political and market pressure and with weaker global growth in prospect.

Kevin Carter highlighted his concerns as the trust, which is managed by Aberdeen Standard Investments, reported a 10.6 per cent total return on net asset value for the six months to June 30. This was adrift of a total return of 15.5% for Murray International’s benchmark, a 40-60 combination of the FTSE World UK and FTSE World ex UK indices.

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Mr Carter said: “For many investors, the default path of least resistance is usually viewed as being up, so the prospects of continuing monetary stimulus, notwithstanding clear signs of economic challenges ahead, will likely promote continued confidence.

“However, the path ahead is likely to become increasingly difficult for the global monetary authorities as they navigate the late cycle nature of this economic expansion. Re-establishing some form of economic orthodoxy in an environment of rising political and market pressure will not be straightforward. The extraordinary monetary policies over the past decade have created an enormous legacy of indebtedness that remains the Achilles heel for whatever comes next.”

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He declared that the sharp decline in global bond yields “suggests that weaker global growth is likely to be on the horizon”.

Mr Carter added: “At this stage of the cycle, not only will interest-rate policy become increasingly ineffectual, but also the importance of faltering earnings growth will become progressively more influential.

“Valuation support, through solid earnings, strong balance sheets and well-covered dividends has been noticeably absent from investor considerations of late, but remains the fundamental pre-requisite for capital preservation and growth over the long term.”

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Mr Carter declared the trust and its manager would “remain focused and unwavering in the implementation of such principles in negotiating what may prove to be a testing time for financial markets”.