Monks, which is managed by Baillie Gifford CIO Gerald Smith and deputy manager Tom Walsh, trimmed its exposure to equities by roughly £70m over the stretch as it moved to consolidate its holdings to improve returns.
Roughly a year ago, Monks was the worst performing generalist trust in net asset value (NAV) terms over 12 months, but its turnaround has been rapid.
Reporting to investors, its board said the vehicle had delivered a double-digit share price total return and a 9.4% NAV total return, while the FTSE World Index climbed by 6% in sterling terms.
Some of the biggest contributors to performance included Facebook, TripAdvisor and Sky Deutschland, where the managers said a common thread was an increase in value driven by the companies’ potential for future earnings, rather their cash flows today.
Returns from emerging market-focused firms continued to be scarce, and among Monks’ bets in this area were Chinese gas company Kunlun Energy and BIM, a Turkish discount retailer.
Outlook
As long-term investors, Monks managers Smith and Walsh said that they continue to take a “step back from the noise” – namely the concerns linked to the end of quantitative easing and potentially misleading, shorter-term economic data – and instead preferred to focus on company-specific opportunities.
They said: “We see many exciting opportunities arising from, among other things, the disruption of traditional business models by online alternatives, advances in drug discovery and diagnostics and changes in oil and gas production.”
