EPS for Monks at 0.89p was lower than the 2.26p for the corresponding period a year ago, attributed to new manager Charles Plowden’s preference for growth stocks that reinvest more of their cashflow back into their businesses to drive future growth, rather than pay dividends.
The share price total return for the same period was -6.9%.
Baillie Gifford’s Plowden took over management in March, replacing Gerald Smith, who was in charge for nine years.
Under Plowden’s guidance, the emphasis has changed towards a preference for growth stocks with typically lower dividends.
While hit by global equity market turbulence in August and September, positive contributors to performance included US stocks Royal Caribbean Cruises, Amazon.com and Alphabet (the parent of Google).
New investments included three emerging market stocks – Autohome (a Chinese on-line car retailer), MTN (an African mobile phone network) and Sands China (casinos in Macao).
The company said all three have exciting long-term growth prospects but also face a range of more proximate operational and macroeconomic risks which have contributed to share price weakness and created a buying opportunity.
“That we have been able to identify attractive investments across most parts of the world illustrates both the range of growth opportunities available and the extent of the diversification resulting from our ‘bottom-up’ stock selection process,” said board chairman James Ferguson.
“In short, some six years past the nadir of the global financial crisis, and despite some near term anxieties, we are inclined to an optimistic view of the future.”
