Monks Investment Trust Delivers Strong Annual Results Amid Market Shifts

There is a trade-off, though. Buybacks are useful, but they do not fix weak long-term performance on their own. If the portfolio does not deliver over time, buybacks become more of a sticking plaster than a cure. This year, thankfully, Monks had both a portfolio recovery and discount narrowing working together.

Portfolio performance drivers: AI winners, digital losers and private company exposure

The managers say a clear theme ran through the top contributors – bottlenecks in AI hardware. TSMC, Samsung Electronics, Comfort Systems USA and FTAI Aviation all benefited from demand linked to chips, memory, power and cooling for AI infrastructure.

TSMC was particularly important. It is Monks’ largest holding at 6.2% of total assets and the managers point to its dominant position in advanced chips. The Schiehallion Fund also helped, rising strongly and contributing exposure to private growth companies such as SpaceX and Bending Spoons.

On the flip side, some of the market’s enthusiasm for AI infrastructure came at the expense of companies seen as vulnerable to AI disruption. Tencent, CoStar Group and Paycom Software were among the detractors. Elevance Health also hurt performance, but for healthcare policy and cost reasons rather than AI.

My read is that Monks has had a decent year in stock selection, just not quite enough to beat a surging world index on NAV. That is not disastrous, but it does matter. When markets are this strong, investors will ask why a growth-focused trust did not do more than keep pace.

How Monks Investment Trust is repositioning for a changing global market

This is where the results get more interesting. The managers are not just talking about AI. They are broadening the portfolio into what they call new bottlenecks in the physical world – energy, copper, infrastructure and defence-related supply chains.

New holdings included EOG Resources, EQT Corp and Tidewater in energy, plus Freeport-McMoRan Copper in mining. They also added steadier businesses such as Philip Morris, Midea and Dino Polska, along with banks including Credicorp, UOB and SEB.

That shift matters because it reduces the risk that Monks becomes a one-theme AI vehicle. Technology still made up 33.9% of total assets at the year end, but financials rose to 14.4% from 10.2% and energy increased to 4.0% from 2.0%. That looks like a deliberate attempt to make the portfolio more balanced and more resilient.

Private companies and Schiehallion exposure: exciting upside, but investors should watch valuation risk

Monks had 4.6% of the portfolio in direct private company investments and another 5.4% in The Schiehallion Fund. So roughly 10.0% of assets were tied to unlisted exposure or a fund focused mainly on unlisted businesses.

That adds spice. It gives investors access to companies like SpaceX and ByteDance that are hard to own in public markets. It also adds valuation risk, because private assets are not priced every second like listed shares.

To be fair, the trust gives more detail than many on how these holdings are valued. Baillie Gifford uses a valuations committee, independent third-party advice from S&P Global, and a rolling three-month review cycle. That is reassuring, but private valuations are still part art, part science.

Monks gearing, costs and dividend: sensible structure, modest income

Gearing – effectively borrowing to invest – remained fairly restrained. Net gearing was 8.5% and gross gearing was 8.9%, against a strategic borrowing target of 10%. In rising markets that helps returns, but it also adds risk if markets turn lower.

Costs stayed competitive. The ongoing charges ratio was 0.44%, only slightly above 0.43% last year. For a globally managed investment trust with active stock picking and some private exposure, that is still pretty lean.

Income is not the main event here. Monks is run for capital growth, not dividends, and the board is recommending a final dividend of 0.9p, up from 0.5p. If you want yield, this is not really the point of the trust.

Balance sheet and net assets: a much healthier year after 2025’s setback

Shareholders’ funds rose to £2.52 billion from £2.32 billion. Total investments were worth £2.74 billion and the company generated a net return after tax of £631.7 million, compared with a loss of £16.8 million in 2025.

That is a very solid financial bounce-back. The trust also finished with £18.4 million in cash and cash equivalents, while borrowings stood at £222.9 million at book value.

What retail investors should take away from the Monks Investment Trust results

Overall, these are good results. Not perfect, but good. Shareholders got a strong return, the discount narrowed materially, the board backed that up with heavy buybacks, and the managers are trying to adapt the portfolio to a world that looks broader than just mega-cap tech.

The main negative is simple: Monks still did not beat the FTSE World Index on NAV over the year. In a market where passive global funds returned 31.0%, active managers need to prove their worth. This year, Monks got close, but not over the line.

Still, I think the trust has done enough here to rebuild confidence after a tougher prior year. If you already own it, the update supports the case for patience. If you are considering it, the key question is whether you want a long-term global growth trust with meaningful active bets, some private company exposure, and a board that is clearly serious about managing the discount.

That is a fairly attractive package – just remember it comes with more moving parts than a plain vanilla world tracker.