Monks Investment Trust: August 2026 update

• The managers look for companies across three growth categories: stalwarts, rapid, and cyclical growth

• Veteran manager Spencer Adair retired from the industry earlier in 2026

• Long term performance has been positive, particularly when growth investing is in favour

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 invest anywhere in the world, including higher-risk emerging markets, but tend to invest more in developed regions like the US and Europe. The trust could form part of an adventurous investment portfolio or work well alongside other investments in unloved companies with recovery potential.

Investors in closed-ended funds should be aware that the trust can trade at a discount or premium to Net Asset Value (NAV).

Manager

The trust is managed by Malcolm MacColl, Helen Xiong, and Michael Taylor, who are members of Baillie Gifford’s Global Alpha team.

MacColl joined Baillie Gifford as a graduate in 1999. He worked in the UK Small Cap and North American teams before becoming a founding member of the Global Alpha team in 2005.

Xiong has worked at Baillie Gifford since 2008 and has managed Monks since 2024. Before joining the Global Alpha team, she gained experience across many different areas of the market, including Developed Asia, UK, US, and Emerging Markets.

Taylor rejoined Baillie Gifford in 2022, having previously been at the firm from 2009-2014. He became a manager of Monks in April 2026 following the retirement of long-serving manager Spencer Adair. The two worked closely together following Taylor’s return to the business, allowing for a smooth transition of responsibilities upon Adair’s retirement.

The managers are supported by the wider Global Alpha team, which includes four analysts, one of whom is dedicated to environmental, social, and governance (ESG) analysis. The managers also leverage the vast experience across Baillie Gifford with the use of a scout network. The scouts are dedicated analysts looking for investment ideas for the trust within their specialist regions.

Process

The managers invest in companies that fall into one of three categories. ‘Growth stalwarts’ are companies that are already dominant in their industry and should keep steadily growing. ‘Rapid growth’ is often focused on early-stage and innovative companies with large potential. Finally, ‘cyclical growth’ companies are those whose growth tends to be more dependent on the strength of the economy.

The trust invests in large companies and higher-risk smaller companies. The managers also invest in higher-risk private companies that aren’t listed on a stock exchange. Most of the trust’s unlisted exposure is through the Schiehallion Fund, an investment trust managed by Baillie Gifford that invests in later-stage private companies. This currently makes up 5.2% of the trust. The managers won’t invest more than 10% of the trust in private companies.

As at the end of June 2026, ‘cyclical growth’ was the largest portion of the trust at 40.1%. Recent additions to this part of the portfolio include Asian technology companies SK Hynix in Korea and Taiwan’s MediaTek. Both are playing a key role in the development of artificial intelligence (AI) solutions. An investment was also made in US regional bank Cullen/Frost while the managers sold their investment in Japanese chemical company Nippon Paint.

‘Rapid growth’ is the second largest category, accounting for 30.0% of the portfolio. This includes companies such as Nvidia, SpaceX, and Chinese tech giant Tencent. A recent addition to this portion of the trust is AI company Anthropic. The trust no longer invests in solar business Enphase Energy.

Finally, the ‘growth stalwarts’ category makes up 29.4% of the portfolio and includes companies like Amazon, Mastercard, and Microsoft. In the past year, the managers have added investments in Apple and industrial gases business Linde.

As a global trust, the managers can invest anywhere in the world. They currently find most opportunities in North America, which accounts for 56.9% of the trust. The rest is spread across Europe, Japan, the UK, with some of the trust also invested in emerging markets. In terms of sectors, the managers invest most in technology, industrials, and financials.

The managers use gearing (borrowing to invest). This can boost gains but also increases losses, so is a higher-risk approach. At the end of July 2026 gearing stood at 8%. The managers can also use derivatives, which can add risk.

Culture

Monks Investment Trust was established in 1929 and is part of the FTSE 250 index. The trust is managed by Baillie Gifford, an independent business founded in 1908 and 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.

All three managers of Monks are partners at the firm. 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.

ESG integration

All of Baillie Gifford’s funds are run with a long-term investment horizon in mind. The firm’s fund managers see themselves as long-term owners of a business, not short-term renters. Assessing whether society will support, or at the very least tolerate, the business model over the long term and whether management will act as good stewards of shareholders’ capital are important parts of the investment process.

Dedicated ESG analysts sit with and report into both their respective investment teams and the central ESG function. The firm’s ESG efforts are supported by a dedicated Climate team. Individual investment teams are responsible for voting decisions and engagement for the companies they invest in. Investment in controversial weapons is prohibited across the firm.

The firm reports all its voting decisions, as well as providing rationale in situations where it votes against management or abstains, in a detailed quarterly voting report. There’s also a quarterly engagement report which details the companies engaged with and the topic discussed. Further engagement case studies are available on the website. All this information is brought together in the firm’s annual Investment Stewardship Activities report.

Baillie Gifford withdrew from the Net Zero Asset Managers’ Initiative and Climate Action 100+ in 2024, citing concerns that membership had become contested and risked distracting from its core responsibilities. We viewed this as a disappointing backward step, but the firm stated that this decision didn’t change its approach to analysing climate-related risks or engaging with investee companies.

Cost

The ongoing annual charge over the trust’s financial year to 30 April 2026 was 0.44%, a slight increase from 0.43% the previous year. Investors should refer to the latest annual reports and accounts, and Key Information Document for further details of the risks and charging structure.

The annual charge to hold investment trusts in the HL ISA, SIPP, or Fund & Share Account is 0.35% (capped at £150 p.a. in each account) and 0.25% in the HL Lifetime ISA (capped at £45 p.a.). There are no charges from HL to hold investment trusts within the HL Junior ISA. As investment trusts trade like shares, both a buy and sell instruction will be subject to the HL share dealing charges.

Performance

Monks Investment Trust has delivered strong returns since the Global Alpha team assumed responsibility in 2015. The trust’s share price has returned 276.3%* to the end of July 2026, ahead of the 186.1% average of the AIC Global sector. The trust’s NAV grew 253.9% over the same period. Past performance isn’t a guide to the future.

While MacColl has been involved with the trust throughout this time, previous managers Spencer Adair and Charles Plowden were also significant contributors and some of the trust’s strong performance will be attributed to their involvement.

Over the trust’s last financial year, to the end of April 2026, its share price returned 35.6% while NAV grew 29.3%. The average peer returned 22.2%.

The top contributor for the trust over this period was the investment in Baillie Gifford’s Schiehallion fund. This benefited from investments in companies like SpaceX and technology business Bending Spoons.

The trust’s investments in companies playing a role in the build out of AI solutions also performed well, including Taiwan Semiconductor Manufacturing Company and Korea’s Samsung Electronics.

Investments detracting from performance included US insurer Elevance Health, which suffered from changes in healthcare policy. Paycom, a payroll software provider, and CoStar, which provides information to the real estate sector, also detracted on fears that AI would disrupt their business models.

At the time of writing the trust trades at a discount of 5.2%, compared to an average over the last 12 months of 5.8%.