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This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. With this commentary, Kepler Partners LLP does not intend to influence your investment firm's behaviour.
The objective of the company is to invest globally to achieve capital growth. This takes priority over income and dividends. The company seeks to meet it objective by investing principally in a portfolio of global quoted equities
Bailiie Gifford & Co Limited.
Charles Plowden; Malcolm MacColl; Spencer Adair;
Association of Investment Companies (AIC) Sector
12 Mo Yield
Dividend Distribution Frequency
Latest Market Capitalisation
Latest New Gearing (Cum Fair)
Latest Ongoing Charge Ex Perf Fee
(Discount)/Premium (Cum Fair)
Daily Closing Price
Monks Investment Trust (MNKS) aims to deliver long-term capital growth through a well-diversified, actively managed, global equity portfolio.
Rigorous, bottom-up analysis is at the heart of the investment process, with the managers, Charles Plowden, Spencer Adair and Malcolm MacColl, looking to identify growth companies with above-average earnings growth. The team takes a long-term view on their holdings as this ensures that the fundamental attributes of a company are given ample time to drive returns. The investment company has an annual turnover of just 17%, according to the May factsheet.
Diversification is a key characteristic of the trust, and the managers split holdings into four categories depending on the anticipated growth. Holdings are also divided into three broad holding sizes that allow the managers to embrace the potential for asymmetry of returns through positions in stocks with higher risk-return characteristics.
Since the new managers took over the portfolio in March 2015, the trust has performed strongly relative to both its peers and the benchmark FTSE World. Over the past four years, the trust has delivered NAV total returns of 91.4%. In comparison, the FTSE World, the AIC Global sector and the IA Global sector have delivered 70.1%, 75.3% and 56.6%, respectively. With that said, it has come at the expensive of volatility and, over the same period, the fifth-highest standard deviation, at 17.2%, in the 16-strong peer group. Returns have been even more volatile over the short term. Over the past year, the trust has the second-highest beta, at 1.21, in the AIC Global sector and the third-highest standard deviation, at 20.37. The final quarter of 2018 saw the trust being hit particularly hard, falling by 13.7% in NAV total returns. In comparison, the FTSE World index lost 10.9%. However, there has since been a rally and from the start of the year the trust has produced NAV total returns of 26.5%, relative to 20.1%, 18.8% and 19.8% returns for the benchmark, AIC peer group and IA peer group, respectively.
At present Monks is trading at premium of 4% relative to the sector-weighted average discount of 0.2%.
Monks has plenty of characteristics that make it an attractive vehicle for investors looking for exposure to exciting growth companies across the globe.
Diversification of risk is a key attribute of the portfolio, illustrated by the high number of holdings – currently 132 – and the unique approach to looking at them, based on conviction and growth characteristics. We believe this is particularly attractive in the current volatile environment, where even a tweet can cause waves across the markets.
Charles Plowden, supported by Spencer Adair and Malcolm MacColl, has a proven track record and the company’s performance has been impressive over the short and long term. Clearly the change in strategy in 2015 has had a lot to do with this, and the trust sits in the top third of trusts for NAV total returns over the past six months, one year and three years. This has, however, now been reflected in the trust’s premium, which currently sits at 4% relative to a weighted average discount of 0.2% across the Global sector. Should the trust slip to a discount, we believe it to be an attractive opportunity for an entry point.
|Well diversified, growth-orientated portfolio
||Trading on a premium|
|Strong long and short-term returns relative to the benchmark and peers||High volatility|