The Monks Investment Trust produced a “modest” outperformance of both its benchmark and peer group in the year to the end of April helped by its exposure to technology businesses characteristic of the Baillie Gifford approach.
During the year the trust’s net asset value total return was 3.4% and the share price total return was 3.7%, while the FTSE World Index returned -1% and the IT Global sector peer group returned -3.5%.
The trust’s annual report said the strongest contributors to performance were a handful of online enabled technology businesses, including Amazon, Shopify and Teladoc, which have seen acceleration in demand for their services during lockdown.
Over the past year Amazon’s share price has climbed 29% while Shopify is up 63% and Teladoc is up a more modest 2%. The portfolio also counts Alphabet, Alibaba and Microsoft among its top 10 holdings.
Monks Investment Trust top 10 holdings
| Amazon | 4.2% |
| Naspers | 3% |
| Alphabet | 2.7% |
| Alibaba Group | 2.6% |
| Moodys Corp | 2.3% |
| The Schiehallion Fund | 2.3% |
| Anthem | 2.2% |
| Microsoft | 2.2% |
| Mastercard | 2.1% |
| Prudential | 2% |
Source: Factsheet
Writing in the report, managers Charles Plowden, Spencer Adair and Malcolm MacColl said: “An economic crisis can tilt the playing field in favour of innovation and the most adaptable companies. Whilst early days in the coronavirus pandemic, many of the portfolio’s holdings have risen to the challenge.
“We believe that the current crisis is likely to accelerate many changes which were already underway, perhaps most obviously in the growth of digital solutions to consumption, entertainment, healthcare and business operations.”
Monks chairman James Ferguson noted it has been five years since the trust changed its investment approach and the board believes that this is an appropriate time to review the results. In March 2015 Baillie Gifford’s global alpha desk took over management of the portfolio with Plowden replacing Gerald Smith and Adair and MacColl appointed as deputy managers.
Since then the NAV total return has been 82.7% and the share price total return was 115.5% against the index’s 55.1%.
But last month it was announced that Plowden, the portfolio’s lead manager, would be retiring at the end of April 2021. Following his departure, Adair will step up to become lead manager and MacColl will continue as deputy manager.
Elsewhere, the report said invested gearing was 6.5%, unchanged on a year earlier, which remains below the 10% level the team regards as the long-term neutral position.
The board has also recommended a single final dividend of 2.5p should be paid, compared to 1.85p last year.
Ferguson is retiring from the board at the company’s AGM in September at which point Karl Sternberg will assume the role of chairman. Edward Harley, who has been a director since 2003, will be retiring in 2021.
Share price return 1 May 2019 to 30 April 2020 versus benchmark and sector
| Monks Investment Trust PLC Ord 5P TR in GB | 3.71 |
| FTSE World GTR in GB | -0.31 |
| IT Global TR in GB | -3.46 |
