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Monks Investment Trust: August 2021 update

Investment Analyst Henry Ince shares our analysis on the manager, process, culture, cost and performance of Monks Investment Trust.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

This article is more than 6 months old

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

  • Spencer Adair and Malcolm MacColl are seasoned investors, and both joined Baillie Gifford over 20 years ago
  • The managers look for companies across four growth categories: stalwarts, rapid, cyclical and latent
  • Performance has been strong since Baillie Gifford’s Global Alpha team took control in 2015

How it fits in a portfolio

Monks Investment Trust aims to deliver long-term growth by investing in companies at various stages of growth. The managers can invest anywhere in the world including higher-risk emerging markets, but they tend to invest more in developed regions like the US and Europe. As a highly diversified trust it could be a useful building block for an adventurous portfolio, or work well alongside other investments in unloved ‘value’ companies with recovery potential. Investors in closed-ended funds should be aware the trust can trade at a discount or premium to the net asset value (NAV).


Spencer Adair took over as lead manager in May 2021 following the retirement of veteran manager Charles Plowden. Adair worked closely with Plowden having been deputy manager since 2015 and involved with the Global Alpha team since launch in 2005. Adair joined Baillie Gifford as a graduate in 2000 and became a partner in 2013. During his career he has worked across a variety of different teams including Japan, Europe and the UK.

Malcolm MacColl has been deputy manager since 2015 and worked with Adair for over 15 years. MacColl also joined as a graduate in 1999 and has been mostly focused on North American companies. Following Plowden’s retirement, MacColl was named joint senior partner at Baillie Gifford.

The managers are part of the Global Alpha team which includes the support of fellow partner Helen Xiong and four analysts, one of whom is solely dedicated to Environmental, Social and Governance analysis (ESG). They also benefit from the wider resource available at Baillie Gifford which consists of over 100 investment professionals.


The managers invest in companies that fall into one of four growth categories – ‘stalwarts’ that are already dominant in their industry and should keep steadily growing; ‘rapid’ often early-stage and innovative companies with big potential; ‘cyclical’ companies whose growth tends to be tied to the strength of the economy; and ‘latent’, which can be out-of-favour but have recovery potential. They invest both in large companies and higher-risk smaller companies.

Over the past five years the amount invested in cyclical companies has decreased, with the managers adding more money to companies with rapid growth potential. Currently these account for around half of the trust’s assets which is near the higher end for any one category than in the past.

As a global trust, the managers can invest anywhere in the world, but they currently find the most opportunities in North America with over half of the trust invested there. The other half is spread across developed markets in Europe and Asia and higher-risk emerging markets such as China and India. Sector-wise, the managers invest most in technology, financials, consumer discretionary and healthcare.

The managers also invest in higher-risk unlisted (private) companies which are not listed on a stock exchange. The majority is through The Schiehallion Fund, an investment trust manged by Baillie Gifford that invests in later stage private companies. The managers also cherry pick some of the best ideas from this trust and invest in them directly. Recent examples include TikTok owner Bytedance and Epic Games. At the end of the trust’s financial year (end of April 2021) these collectively accounted for 6% of the portfolio. The managers won’t invest more than 10% of the trust in unlisted companies.

Over the trust’s last financial year, the managers bought 30 new companies, the majority of which sit in the rapid growth bucket. Examples include cloud technology companies Cloudflare, Datadog and Twillio. Healthcare companies like Moderna, Exact Sciences and Staar Surgical were also added to the trust.

Other new investments included Lyft, the ride sharing company, and airline Wizz Air. The managers believe these companies have the potential to emerge from the pandemic in a stronger position.

In contrast, 24 companies were sold including healthcare company Seagen, which reached the managers’ share price target. Payments company Visa was also sold in favour of competitors Adyen and Stripe. The managers also took profits from a number of companies, including Alibaba, Amazon and Tesla, following a period of strong performance.

The managers use gearing (borrowing to invest), which can boost gains but also increases losses, so is a higher-risk approach. They can invest in derivatives too which, if used, also adds risk.


Monks Investment Trust was established in 1929 and is part of the FTSE 250 index. The trust is managed by Baillie Gifford, an independent private partnership founded in 1908. It's owned by its partners, who work full time at the firm. This ownership structure means senior managers have a vested interest in the company, and its funds and investment trusts, performing well. We think this has helped cultivate a culture with a long-term focus, where investors' interests are at the centre of decision making. We also like that fund managers are incentivised in a way that aligns their interests with those of long-term investors.

Baillie Gifford recognises the risks posed by ESG issues and uses its position to encourage companies to act in a sustainable way. The company has a dedicated Governance and Sustainability Team, which is responsible for producing ESG research that challenges and contributes to the investment decision-making process. They also monitor companies' progress, engaging with them on ESG matters where appropriate.


The ongoing annual charge over the trust’s financial year to 30 April was 0.43%. Investors should refer to the latest annual reports and accounts, and Key Information Document for details of the risks and charging structure. If held in a SIPP or ISA, the HL platform charge of 0.45% per annum (capped at £200 per annum for a SIPP and £45 for an ISA) also applies. The platform charge doesn’t apply if the trust is held in a Fund and Share Account.


Monks Investment Trust has delivered strong returns since the Global Alpha Team took over in 2015. Over this period the trust’s share price has grown 226.8%* vs 114.4% for the FTSE World Index. Adair and MacColl were deputy managers during this time, and directly involved in the investment decision making process, so we think it’s fair to attribute this track record to both them and Charles Plowden. Past performance is not a guide to the future though and exceptional returns are unlikely to be consistently repeated. Investments fall as well as rise in value and you could get back less than you invest.

Over the past year the trust’s delivered strong returns. Its NAV grew 37.1% compared with 25.5% for the benchmark. The share price rose 30.2% and currently trades at a 0.96% discount to NAV. The trust is solely focused on growth and its dividend policy is to pay the minimum required to retain investment trust status. This meant for the last financial year the dividend which was 2.0p.

Over the trust’s financial year, it benefited as several companies saw impressive gains in their share prices. Many of these are within the ‘rapid’ growth bucket like top performer Tesla, the electric car maker, whose share price rose over 1000%. Others such as gaming company Sea Limited, commerce platform Meituan Dianping and real estate firm Zillow have benefited from the pandemic shifting consumer activity online. The trust also had little exposure to sectors that were more impacted by Covid-19, like travel and oil & gas. Not all the trust’s investments did well though. Japanese financial services businesses Sumitomo Mitsui Trust and MS&AD Insurance, and food delivery app Just Eat Takeaway were among the weakest performers.

Annual percentage growth
June 16 -
June 17
June 17 -
June 18
June 18 -
June 19
June 19 -
June 20
June 20 -
June 21
FTSE World 22.9% 9.3% 10.4% 5.8% 25.5%
Monks Investment Trust 59.9% 22.1% 9.5% 15.3% 30.2%

Past performance is not a guide to the future. Source: *Lipper IM to 30/06/2021.

Find out more about Monks Investment Trust, including charges

Monks Investment Trust Key Investor Information

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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