The performance of Baillie Gifford's Monks Investment Trust moved back into positive territory over six months after the manager claimed Brexit was "very good news" for the company.
The £1.1bn trust has posted a net asset value total return of 25.3 per cent for the six months to 31 October against the FTSE World index, which has returned 23.6 per cent over the same period.
This performance is a marked turnaround after Monks made a loss in the last financial year.
According to the company’s half-year results, the consequences of Brexit have been “very good news” for Monks, largely because 90 per cent of the portfolio’s assets are denominated in currencies other than sterling.
The trust has also benefited from the post-Brexit rally of equities between May and October.
FE figures show Monks has also significantly outperformed the global sector over the past six months, returning 26.3 per cent against the peer group average of 15 per cent.
Some of the biggest positive contributors to the performance were technology stocks such as US and Chinese online retailers Amazon and Alibaba, US online search engine group Alphabet, and German enterprise software company SAP.
But it was healthcare holdings which underperformed, including the likes of Alnylam and Myriad Genetics, which the manager pointed out are relatively young businesses exposed to the “inevitable risks” involved in developing novel treatments.
“To reflect these risks, they are held in smaller than average size.”
While the results make it clear most of the portfolio was not directly affected by Brexit, the trust’s lead manager Charles Plowden made reductions to the building materials company CRH and airline Ryanair.
“Their direct exposure to both the UK and broader European Union is likely to be unhelpful for their future growth.”
But the manager took advantage of the market weakness seen immediately after the Brexit vote by buying more Prudential shares at a lower price.
“Although it is a UK listed company, much of its growth comes from Asia and this remains on track,” the results state.
Brexit aside, 12 new holdings were bought over the six months as the managers identified new stocks for the ‘rapid’ growth category, including an online share trading platform, price comparison website and pet insurer.
The managers sold 14 stocks, including the likes of American Express, Volvo, Banco Popular Espanol and Aggreko, where the investment case had “not developed as first hoped”.
Ben Yearsley, investment director at the Wealth Club, said: "The call for 2016 has clearly been to be invested outside of the UK in non-sterling assets, as sterling has fallen so much this year.
"The question is whether it was a deliberate ploy by the managers to have only about 7 per cent invested in the UK or an accident?"
Mr Yearsley said Baillie Gifford is an "excellent" fund management company with many decent funds and trusts, but he added: "I prefer their Scottish mortgage trust to this one as it has been more consistent".
