This is independent research. The analyst who has prepared this research is not aware of Kepler Partners LLP having a relationship with the company covered in this research report and/or a conflict of interest which is likely to impair the objectivity of the research and this report should accordingly be viewed as independent.
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%.
This report has been issued by Kepler Partners LLP for communication only to eligible counterparties and professional clients as defined by the Financial Conduct Authority. Its contents may not be suitable for and are not to be communicated to or be relied on by retail clients. It is not an indication as to the suitability or appropriateness of investing in the security or securities discussed.
Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments.
The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country. In particular, this website is exclusively for non-US Persons. Persons who access this information are required to inform themselves and to comply with any such restrictions.
The information contained in this website is not intended to constitute, and should not be construed as, investment advice. No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the information and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information, for any errors, omissions or misstatements, negligent or otherwise. Any views and opinions, whilst given in good faith, are subject to change without notice.
This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.
Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm’s internal rules. A copy of the firm’s Conflict of Interest policy is available on request.
PLEASE SEE ALSO OUR TERMS AND CONDITIONS
Kepler Partners LLP is authorised and regulated by the Financial Conduct Authority (FRN 480590), registered in England and Wales at 9/10 Savile Row, London W1S 3PF with registered number OC334771.
Fund History: Monks Investment Trust
Despite being a popular allocation for investors, the UK Equity Income sector is currently plagued by the problem of concentration. Our analysis suggests smaller companies could be a strong alterna...
We examine the relationship between how much a fund costs and how it performs, with surprising results...
In the second part of our active management series, we assess the most active managers across the major closed-ended equity sectors…
In a bid to keep up with investment trusts, new rules are coming into effect requiring independent directors for OEICs. Will these changes help prevent another Woodford?