Monks Investment Trust: A Summary of the Annual Report

Monks Investment Trust, managed by Baillie Gifford, aims to achieve long-term capital growth by investing globally in a diversified portfolio of companies. The annual report provides a comprehensive overview of the trust’s performance, strategy, and outlook.

Performance: The report typically highlights the trust’s net asset value (NAV) total return and compares it to its benchmark, often the FTSE All-World Index. Key performance indicators are scrutinized, including the trust’s discount or premium to NAV. Investors look to see if the trust has outperformed its benchmark over various timeframes (e.g., 1, 3, 5, and 10 years). The report will analyse the key contributors to, and detractors from, performance during the year. This involves dissecting the individual stock selections and their impact on the overall portfolio return.

Investment Strategy: Baillie Gifford’s investment philosophy focuses on identifying companies with the potential for significant long-term growth. The report details the trust’s investment approach, emphasizing themes such as disruptive technology, emerging markets, and innovative business models. It explains how the managers allocate capital across different regions, sectors, and company sizes. Active management is a core principle, involving rigorous research and fundamental analysis to identify undervalued growth opportunities. The report outlines the trust’s approach to risk management, including diversification and monitoring of portfolio exposures.

Portfolio Composition: The annual report presents a snapshot of the trust’s portfolio holdings. This includes a list of the top ten holdings, providing insights into the managers’ conviction in specific companies. Sector and geographic allocations are disclosed, offering a view of the portfolio’s diversification. Changes in portfolio composition are explained, highlighting new investments and disposals. This section offers transparency on the trust’s exposure to different market segments and industries.

Environmental, Social, and Governance (ESG): The report typically addresses the trust’s approach to ESG factors. It may outline how ESG considerations are integrated into the investment process, influencing stock selection and engagement with investee companies. Information on the trust’s voting record and engagement activities is often provided. This demonstrates the trust’s commitment to responsible investing and its influence on corporate behavior.

Outlook: The managers’ outlook for the global economy and financial markets is included. They assess the key risks and opportunities facing the trust, considering factors such as inflation, interest rates, and geopolitical events. The report also touches upon the trust’s future strategy and priorities, outlining its objectives for the coming year. This section provides valuable insights into the managers’ expectations and positioning for the future.

Shareholder Information: Key information such as dividend payments, share buyback programs, and management fees are discussed. This is crucial for shareholders to understand the costs associated with investing in the trust and the distribution of returns.

In summary, the Monks Investment Trust annual report offers a comprehensive review of the trust’s performance, strategy, and outlook, enabling investors to assess its suitability for their investment goals.