The Monks Investment Trust, managed by Baillie Gifford, has lagged behind the FTSE World Index, with returns falling in the space of a year.
According to its preliminary results for the year ending 30 April, the £901m trust lost 0.4 per cent, nearly 1 per cent behind the FTSE World Index which delivered a total return of 0.5 per cent.
This follows the appointment of a new management team in March last year, with a switch to Baillie Gifford’s global alpha team, led by Charles Plowden.
The trust also overhauled its portfolio the following month, and has since made further changes, namely increasing its exposure to listed equities, which now comprises around 97 per cent of the assets, and the sale of the US Treasury bond.
This comes after Mr Plowden, who was taken on by Baillie due to concerns over the trust’s underperformance, said the trust has suffered over the past few years from not taking advantage of its ability to gear while markets were going up.
Chairman of the trust James Ferguson said: “It is too early to judge the success of the new approach long term investment, but we are encouraged by the quality of our portfolio and we are optimistic about its prospects.”
Earnings per share for the financial year hit 2.31p, which is notably lower than the 4.74p for the previous year.
The managers focus on companies they think will flourish at an above average rate over a five year period, and are focused mainly on three sectors, namely China, the US, and companies that use technology and innovation to disrupt existing traditional business models.
According to the results, for the first time since 2004 no shares were bought back during the year.
Scott Gallacher, chartered financial planner at Rowley Turton, said: “I’d agree with James Ferguson that a year is too early to make a call on the relative performance of the new management team.
“That said, the performance figures I have seen today indicate that the underlying investments of the trust, that is net asset value, have done ok over the past 12 months and the underperformance of the trust is down to a widening of the discount.
“With a current discount of 13 per cent it could be argued that this was a good time to invest in this trust.”
katherine.denham@ft.com
