Monks (MNKS)

Monks (MNKS) aims to serve as a core holding, providing investors with exposure to a diverse range of growth opportunities across the globe, including both developed and emerging markets. The Portfolio is structured into three key buckets: rapid growth, growth stalwarts and cyclical growth. These categories reflect the types of businesses managers Spencer Adair, Malcolm MacColl and Helen Xiong seek – ranging from disruptors in high-growth industries to durable franchises that can deliver robust returns regardless of macroeconomic conditions, as well as businesses operating in more cyclical areas and with typically underappreciated growth potential.

The portfolio is currently slightly skewed towards rapid growth, the Management team having topped up their positions in some of the strong performers within this bucket, such as NVIDIA and DoorDash. They also introduced a new holding, Dutch Bros in the first half of the trust’s 2024 financial year, a US-based coffee chain that has experienced rapid revenue growth since 2019 and has plans for significant store expansion. Additionally, five new companies were added to the cyclical growth bucket in 2024, including Builders FirstSource and Norwegian Cruise Line Holdings.

As these recent additions suggest, MNKS has a bias toward small- and mid-cap companies relative to its benchmark and sector peers. The managers have identified companies in this segment of the equity market that are experiencing strong earnings growth but have been overlooked by the market, which has favoured tech mega-caps over the past two years. As such, MNKS has lagged its benchmark in 2023 and 2024, despite delivering double-digit returns in each calendar year.

Over the past 18 months, the managers have also aimed to increase conviction in what they consider their best ideas. As a result, they have been reducing the number of holdings, from 120 to around 100 by the end of last year, with 13 names sold in 2024 alone.