TIDMMNKS
RNS Number : 1990D
Monks Investment Trust PLC
20 June 2023
RNS Announcement
The Monks Investment Trust PLC (MNKS)
Legal Entity Identifier: 213800MRI1JTUKG5AF64
Results for the year to 30 April 2023
NAV (borrowings at fair
value) * (1.6%)
NAV (borrowings at par)
* (2.6%)
-------
Share Price* (7.0%)
-------
Benchmark 3.2%
-------
Source: Refinitiv / Baillie Gifford. All figures are total
return (*) . See disclaimer at the end of this announcement.
* Alternative Performance Measure - see Glossary of Terms and
Alternative Performance Measures at the end of this
announcement.
Benchmark: FTSE World Index (in sterling terms)
The following is the Preliminary Results Announcement for the
year to 30 April 2023 which was approved by the Board on 19 June
2023.
Chairman's Statement
Performance
During the year the NAV total return, with borrowings calculated
at fair value, was -1.6%. The share price total return was -7.0%,
while the FTSE World Index returned +3.2%. This is a disappointing
outcome against the backdrop of last year's declines. It is now
eight years since the change in investment approach was implemented
in March 2015. Since the end of March 2015, the NAV total return
has been +126.7%* against the comparative index at +127.4%*. Over
the same period, the share price total return was +131.3%*. Recent
underperformance by growth stocks has wiped out the cumulative
gains of the prior years. We are very mindful of the need to return
to outperformance, in a variety of market conditions.
Share Capital
In what has been a difficult year from a performance
perspective, we were pleased to issue new shares to former
shareholders of The Independent Investment Trust PLC ('IIT'). The
Company issued 16.7 million new ordinary shares in return for
GBP173.1 million of IIT's assets, comprising GBP72.3 million cash
and GBP100.8 million in equity investments, in accordance with the
prospectus and circular published on 6 October 2022. This should be
seen as an endorsement of Monks' credentials as a long-term growth
vehicle for savers. Benefits to shareholders include increased
scale, an estimated reduction to the ongoing charges ratio of two
basis points, and cash to invest at an advantageous point in the
performance cycle. The Board is delighted to welcome these new
shareholders to the Company.
The Board does not have a formal discount control mechanism,
however, against a backdrop of widening discounts across the
investment trust sector, the Board has been active in buying shares
in the open market. Having issued shares when Monks was at a
premium, we feel it is our obligation to be ready buyers at a
discount, not least because we believe that the market is
underestimating the value in our portfolio. Buying in the Company's
own shares at a discount to NAV enhances NAV per share for ongoing
shareholders (approximately +0.48% in the year to end April 2023).
With the shares trading at a consistent discount throughout the
year, the Company bought back 13.6 million shares, costing GBP135.2
million. The discount to NAV with borrowings calculated at fair
value was 9.7% as at 30 April 2023, compared to a discount of 4.4%
at 30 April 2022.
Borrowings and Gearing
Our Investment Trust structure allows gearing, which should
enhance long-term returns. The Board's strategic borrowing target
is 10%. It is expected that gearing will be maintained in the range
of minus 15% to plus 15%. Gearing was 7.3% at the start of the year
and remained moderate throughout, ending the period at 5.3%. Our
long-standing debenture matured in March 2023, leaving the Company
with borrowings in the form of a revolving credit facility which
was 50% drawn at 30 April 2023, and long-term debt issued to
insurance companies at very attractive rates (1.8%) in 2020. The
weighted average rate of interest is currently 3.4% (2022 - 2.8%),
well below the current market rate.
Unlisted Exposure
We currently take comfort from the low exposure of Monks to
unquoted companies, which represent 3.9% of total assets: 2.0% by
way of The Schiehallion Fund, a publicly traded investment company;
and 1.9% through direct investment (2022 - 6.6% combined exposure:
4.4% The Schiehallion Fund; 2.2% direct investment). These are
often the fastest-growth companies, but they also have high
financing needs, and that represents a risk in today's environment
of tightening liquidity and competition for funds. Schiehallion's
shares currently trade at a material discount to net asset value,
which offers the potential for re-rating should sentiment towards
growth capital improve. The Board has tested the valuations of the
small number of investments we hold directly. We believe that they
are realistic and that none is material to the Company. In the long
run, the Manager and the Board believe that unquoted companies
offer us the means to gain exposure to some of the best companies
driving economic change.
Management Expenses
Monks remains competitive on fees and expenses, which helps to
enhance returns to shareholders. The total ongoing charges ratio
for the year to 30 April 2023 was 0.43%, up slightly from 0.40% in
the prior year. The current tiered management fee scale should
ensure that all shareholders will benefit from economies of scale
as asset growth recovers.
Earnings and Dividend
Monks invests with the aim of maximising capital growth rather
than income. All costs are charged to the Revenue Account. The
Board's policy is to pay the minimum dividend required to maintain
investment trust status. Retained earnings are reinvested in the
portfolio. In order to build in headroom for further buybacks that
may reduce the shares in issue qualifying for dividends, the Board
is recommending that a single final dividend of 3.15p be paid,
compared to 2.35p last year, to ensure that the amount retained for
the year does not exceed that permissible.
Governance and Sustainability
The Company's Manager's investment approach - long-term,
bottom-up stock picking and research - marries well with a
thoughtful approach to Environmental, Social and Governance (ESG)
considerations. Understanding the complexities that individual
businesses face is critical as the Manager seeks to assess the
impact of ESG factors on the sustainability of investee companies.
A dedicated Governance and Sustainability analyst supports the
portfolio managers in their engagement with investee companies, and
undertakes a range of thematic portfolio analyses which helps to
inform and direct engagement priorities. Areas of past focus have
included climate change, tax and executive compensation. More can
be found about these assessments, and the Manager's broader
approach, within the Monks Stewardship Report on the Company's page
of the Manager's website
The Board
Following the retirement from the Board of James Ferguson and
Edward Harley, the Directors reviewed the skills, experience, and
balance of tenure lengths of the remaining Board members;
considered recent and anticipated developments in the commercial
and regulatory landscape; and appointed Odgers Berndtson to
commence the search for a new Director. The Board is delighted to
welcome Dr Dina Chaya, who was appointed a Director with effect
from 30 November 2022. She brings her experience as a venture
capital investor, with particular expertise in life sciences and
unquoted investment.
The Board is cognisant of the need to ensure regular refreshment
of its composition. Having seen the departure of a number of very
long-serving Directors over the last few years, the Board considers
that there is an equal need to manage succession so as to ensure
adequate handover periods and retention of the corporate memory.
Jeremy Tigue, who joined the Board in September 2014, will offer
himself for re-election at the forthcoming Annual General Meeting,
his ninth since appointment, but he will not offer himself for
re-election at the 2024 AGM. Given this impending retirement, and
other Directors' plans, the Board has asked that I should stay in
post in order to make sufficient hirings to provide a successor who
could be in post for longer than a couple of years. The Board's
intention is to add one further Director before Jeremy steps down
next year, and another shortly after that.
Outlook
The Board's most important role is to challenge the managers on
your behalf, to justify why their chosen portfolio should deliver
superior returns over the long term. We remain impressed by the
breadth and depth of their research, and their willingness to look
across geographies and sectors to find underappreciated growth,
without a dogmatic approach of narrowing the opportunities to only
the fastest growth companies in relatively new parts of
economies.
The Board has challenged the managers with respect to recent
underperformance, which the managers write about in their report
below The last two years have reminded the managers of the
importance of valuation discipline. The aggressive period of
monetary tightening has most certainly not reined in the pace of
underlying change in economies, as the latest developments in
artificial intelligence demonstrate. The managers remain focused on
capturing this change, and finding the winners as the economic
landscape shifts, even when overall growth is feeble. We believe
that our managers have constructed a portfolio with very good
long-term prospects, thoughtful diversification, and with only a
relatively small premium price for much faster growth than the rest
of the market will deliver. The Board shares Baillie Gifford's
optimism that investors will, in due course, return to attractive
growth companies with sustainable business models.
Annual General Meeting
The Company's AGM will take place on Thursday 7 September 2023
at the Institute of Directors, Pall Mall, London, SW1Y 5ED. In
order to streamline the ordinary business of the meeting and
improve shareholders' experience and representation, the Board
intends to hold the AGM voting on a poll, rather than on a show of
hands as has been customary, so encourages all shareholders to
exercise their votes at the AGM by completing and submitting a form
of proxy. We recommend that shareholders monitor the Company's
website at monksinvestmenttrust.co.uk where any updates regarding
the meeting will be posted. Market announcements will also be made
in the event of any change to the scheduled arrangements.
Should shareholders have questions for the Board or the
Managers, or any queries as to how to vote, they are welcome as
always to submit them by email to trustenquiries@bailliegifford.com
or call 0800 917 2112.
KS Sternberg
Chairman
19 June 2023
Past performance is not a guide to future performance. Total
return information is sourced from Baillie Gifford/ Refinitiv. See
disclaimer at the end of this announcement. For a definition of
terms used see Glossary of Terms and Alternative Performance
Measures at the end of this announcement.
Managers' Report
An environment for growth
In a world where inflation and interest rates are markedly
higher than in the preceding decade and the operating environment
is more challenging for companies, many investors equate growth
with fragility. We do not share this perspective. In contrast, we
believe that the imposition of greater discipline by the market may
be very helpful in separating those companies with profitable
long-term business models from those which were simply the
beneficiaries of a benign funding environment. This underpins our
confidence in the ability of Monks' portfolio to deliver attractive
long-term returns from here. The portfolio has significantly
stronger aggregate balance sheets than the broader market (net
debt-to-equity of 20% for the portfolio versus 50% for the FTSE
World) and typically invests more in pursuit of growth (for
example, the ratio of capital expenditure plus R&D to sales is
11.5% versus 9.0% for the index). This will enable our holdings to
outcompete their peers over time and entrench their competitive
positions.
Performance has been disappointing, and we recognise that we
have made mistakes. We have taken decisive action in repositioning
the portfolio and are excited by what we perceive to be a growing
opportunity set. Sustainable wealth generation is a function of the
underlying performance of businesses from an operational standpoint
and the compounding of cashflows over long periods of time. In this
regard, the Monks portfolio is in good shape - on a 3-year forward
basis the portfolio's earnings are forecast to grow at more than
twice the market rate. We stand confidently behind the portfolio
and our investee companies' potential to drive positive returns for
investors over the long term.
Performance
The current team has managed The Monks Investment Trust for
eight years. Over this period, the fair value NAV total return has
been +126.7%* (share price +131.3%*) compared to the comparative
index (FTSE World) which returned +127.4%*. The year to April 2023
has been challenging. The fair value NAV total return was -1.6%
(share price -7.0%) against the comparative index total return of
+3.2%.
Following very strong performance throughout the pandemic, as
many online businesses performed well, a combination of rising
inflation and interest rates and the potential for weaker demand
has undermined investor confidence in earlier-stage, high-growth
companies. This precipitated a sharp contraction in valuations that
was most acute within the 'Rapid' growth portion of the Monks
portfolio. The overhang on high-growth stocks is reflected in the
holdings that have detracted most from Monks' performance. The
largest is The Schiehallion Fund, a closed-ended investment company
managed by Baillie Gifford that invests in late-stage private
companies. This makes up approximately half of Monks' modest
private company exposure (3.9% of total assets). The underlying
operational progress of the companies in Schiehallion's portfolio
continues to be strong - average revenue growth was over +50% in
2022 - and we remain confident about its long-term potential.
Elsewhere, the share prices for similarly high-growth holdings like
Farfetch (online luxury goods), Cloudflare (internet performance
and security) and Datadog (cloud-based systems monitoring) have all
detracted.
In a vast majority of cases, we are confident that recent share
price weakness does not reflect underlying progress being made by
the companies we own in Monks. However, where our conviction
weakened, we have been forthright in moving on. This has been the
case where:
i. Operational execution has been poor, for example, at Peloton
the home fitness business, and Twilio which operates a
communications software platform;
ii. A tougher operating environment challenged our investee
companies' growth prospects, as it did for Carvana, the US-based
used car retailer;
iii. A prevailing regulatory regime looked likely to negatively
impact future returns, as occurred in China. We sold three holdings
in the period, Tencent Music Entertainment (social media and
music), KE Holdings (real estate), and Brilliance China Automotive
(auto retail). The direct Chinese exposure in Monks is a modest
3.6%.
There have been companies in the portfolio for which strong
operational performance has been rewarded in share price terms.
Highlights include AJ Gallagher, the US insurance brokerage which
has been successfully raising prices and buying competitors,
Alnylam Pharmaceutical, a leader in gene silencing treatment that
has been taking positive steps in broadening the application of its
main treatment and MercadoLibre, the South American ecommerce
platform that continues to grow its micro-financing and payments
ecosystem.
Positioning and optimism
The portfolio, as characterised by Monks' three growth profiles
(Stalwart, Rapid and Cyclical), has shifted materially over the
past twelve months. The sharp fall in the share prices of 'Rapid'
stocks and decisive moves on our part to sell holdings where
operational progress has been underwhelming, has resulted in the
proportion of the portfolio invested in these types of companies
falling by 10 percentage points (from 40 per cent at the end of
April 2022). Elsewhere, the portfolio's 'Stalwart' growth
companies, with their steadier and more certain growth profile,
have performed their balancing role in the portfolio well through
this difficult period.
The opportunity set is broadening and the potential for insight
growing. The breadth of Monk's approach leaves us well-placed to
capture this. Our latest Research Agenda outlines areas of
particular interest. We have been active in adding valuable
long-term growth exposure to the portfolio.
- Increased Return from Patience - during periods of fear and
uncertainty, time horizons shrink and investors focus on the here
and now. As long-term investors, this provides us with a heightened
advantage in two areas. Firstly, in identifying secular growth
companies that are facing near-term headwinds that are obscuring
the potential for long-term growth. For example, we have been
adding exposure to the portfolio in housing-related companies with
new holdings in Floor and Décor (hard floor retailer) and Pool
Corporation (swimming pool maintenance and upgrades). Secondly, the
market's current intolerance of expenditure ignores the value of
ongoing investments by high-growth businesses. We see the
opportunity to be counter-cyclical and have added to existing
positions in Amazon (ecommerce and cloud) and Meta (media and
advertising). A period of more disciplined growth lies ahead and is
not reflected in the valuation of the shares.
- Infrastructure Upgrade - the world's infrastructure needs to
be rebuilt and rewired to cope with more people and a changing
energy mix. We are open-minded about the range of potential
beneficiaries and believe we have added some attractive holdings in
this domain with Eaton in power management and Advanced Drainage
Systems (ADS) in drainage solutions. By way of example, ADS is the
leading manufacturer of plastic piping (70% market share in the US)
for wastewater, with uses spanning commercial, residential,
infrastructure, and agricultural markets. The core of the
opportunity stems from the fact that water infrastructure in the US
has seen dramatic underinvestment over recent decades. Plastic is
likely to continue to take share from traditional concrete piping
reflecting its superior functionality (it does not degrade or
crack, limiting contamination and leaks) and the fact that it is
easier, safer, quicker, and cheaper to install.
- New Growth Frontiers - if the growth engines of the past
decade were the internet, mobile, and software the next decade will
be based on the cloud, data and artificial intelligence. These
technologies are likely to bridge the digital and physical world,
having potentially profound implications for a range of industries.
We appear to be early in some of these transformational areas, for
example, only 15% of IT workloads are stored in the cloud, but
change is likely to be brisk. Indeed, we have seen early signs of
the disruptive effect of AI applications on Chegg, the US online
education business. We took the decision to sell the shares as we
had concerns about falling enrolment numbers and the risk posed by
free-to-use applications like ChatGPT to undermine Chegg's
subscription model. Semiconductors are the "picks and shovels"
underpinning many of these exciting growth trends. We have been
looking at companies that operate across the value chain, seeking
operators with consolidated markets, high barriers to entry and
secular growth. We have therefore purchased positions in Analog
Devices (analogue semiconductors), Entegris (cleaning and
filtration) and ASM International (atomic layer deposition).
- Supply Side Importance - we are convinced that supply-side
factors will be increasingly important in wealth generation.
Following a period of abundant financing, low-cost capital
operators with cash ready to deploy will be at a premium. Which
companies have substantial dry powder to deploy in a world of
capital scarcity? Where are the opportunities for consolidation in
different industries, and which companies are likely to be the
protagonists? We have added to the existing holding in Royalty
Pharma which has a portfolio of royalties from existing drugs and
specialises in late-stage funding of drug development in exchange
for future royalties. This is a differentiated business model and
Royalty Pharma's position as a preferred partner has been elevated
as rates have increased.
Independent Investment Trust
In early November, the Monks portfolio received GBP173m of
assets following the voluntary liquidation and rollover of The
Independent Investment Trust PLC. This comprised around GBP100m in
equity investment holdings and GBP73m in cash. The stocks inherited
were a mix of cyclical companies such as UK housebuilders
Persimmon, Redrow, and Bellway and early-stage growth companies
like Midwich, a distributor of audiovisual equipment, and Bytes
Technology, a software solutions provider. Benefits to shareholders
include increased scale, an estimated reduction to the ongoing
charges ratio of two basis points, and cash to invest at an
advantageous point in the performance cycle.
Governance and Sustainability
We believe that the building blocks of our investment philosophy
- bottom-up stock-level research and long-termism - chime with an
increasing focus on stewardship and ESG. We understand that
businesses operate in a complex and dynamic world where their
activities may have positive and negative impacts. There are no
shortcuts. We believe that getting to know companies on a
case-by-case basis is essential as we seek to understand their
unique circumstances and assess material factors that may influence
their sustainability. This directly impacts our assessment of
holdings within the Monks portfolio. For example, CRH, a supplier
of building materials, is one of the biggest contributors to the
portfolio's carbon footprint. In its case, we believe that a strong
climate strategy is complementary to its long-term ambitions and
can strengthen its competitive advantage. We have had numerous
productive discussions with the management and the board, who have
been receptive and responsive to feedback. We welcomed the
company's new and more ambitious decarbonisation target, which is
industry-leading and has been validated by the Science-Based
Targets initiative (SBTi). Conversely, we recently sold Ubisoft,
the French gaming business, following a misconduct crisis and a
deal to allow Tencent to acquire shares at levels that appeared to
favour the founders at the expense of minority shareholders.
Outlook
Contrary to consensus, we believe the opportunity set is
broadening and the prospects for growth companies are as compelling
as ever. The operating environment for companies has undeniably
changed. We have reflected on where we may have done better and
adjusted the portfolio - we are confident that the companies we own
for Monks are well-placed to adapt and thrive. Monks' proposition
is clear, namely, to grow savers' capital over the long term. The
most certain way to do this is to invest in companies that grow
their earnings over long periods - this is the hard currency of
returns. We are fortunate to be able to look across the growth
spectrum and around the world for ideas. Monks owns an exciting and
eclectic portfolio that is well diversified and it deploys modest
levels of gearing (5.3% on a net basis) that will enhance long-term
returns. We remain unwavering in our commitment to identifying and
owning companies where we see the greatest underappreciation of
future growth. It is this future growth that will drive the returns
of Monks' shareholders long into the future.
Spencer Adair
Malcolm MacColl
19 June 2023
Past performance is not a guide to future performance.
Total return information is sourced from Baillie
Gifford/Refinitiv. See disclaimer at the end of this
announcement.
For a definition of terms used see Glossary of Terms and
Alternative Performance Measures at the end of this
announcement.
The Managers' Core Investment Beliefs
We believe the following features of Monks provide a sustainable
basis for adding value for shareholders.
Active Management
- We invest in attractive companies using a 'bottom-up'
investment process. Macroeconomic forecasts are of relatively
little interest to us.
- High active share* provides the potential for adding value.
- We ignore the structure of the index - for example the
location of a company's HQ and therefore its domicile are less
relevant to us than where it generates sales and profits.
- Large swathes of the market are unattractive and of no interest to us.
- As index agnostic global investors we can go anywhere and only invest in the best ideas.
- As the portfolio is very different from the index, we expect
portfolio returns to vary - sometimes substantially and often for
prolonged periods.
Committed Growth Investors
- In the long run, share prices follow fundamentals; growth drives returns.
- We aim to produce a portfolio of stocks with above average
growth - this in turn underpins the ability of Monks to add
value.
- We have a differentiated approach to growth, focusing on the
type of growth that we expect a company to deliver. All holdings
fall into one of three growth categories - as set out below.
- The use of these three growth categories ensures a diversity
of growth drivers within a disciplined framework.
Long-Term Perspective
- Long-term holdings mean that company fundamentals are given time to drive returns.
- We prefer companies that are managed with a long-term mindset,
rather than those that prioritise the management of market
expectations.
- We believe our approach helps us focus on what is important during the inevitable periods of underperformance.
- Short-term portfolio results are random.
- As longer-term shareholders we are able to have greater
influence on environmental, social and governance matters.
Dedicated Team with Clear Decision-making Process
- Senior and experienced team drawing on the full resources of Baillie Gifford.
- Alignment of interests - the investment team responsible for
Monks all own shares in the Company.
Portfolio Construction
- Investments are held in three broad holding sizes - as set out below.
- This allows us to back our judgement in those stocks for which
we have greater conviction, and to embrace the asymmetry of returns
through 'incubator' positions in higher risk/return stocks.
- 'Asymmetry of returns': some of our smaller positions will
struggle and their share prices will fall; those that are
successful may rise many fold. The latter should outweigh the
former.
Low Cost
- Investors should not be penalised by high management fees.
- Low turnover and trading costs benefit shareholders.
* For a definition of terms see Glossary of Terms and
Alternative Performance Measures at the end of this document
Investment Portfolio by Growth Category as at 30 April 2023*
Holding Growth Stalwarts % Rapid Growth % Cyclical Growth %
Size
(c.10% p.a. earnings (c.15% to 25% p.a. (c.10% to 15% p.a.
growth) earnings growth) earnings growth through
a cycle)
------------------------ ----- ----------------------- ----- ------------------------ -----
Company Company Company Characteristics
Characteristics Characteristics 3/4 Subject to
3/4 Durable 3/4 Early stage macroeconomic
franchise businesses and capital cycles
3/4 Deliver robust with vast growth with significant
profitability in opportunity structural
most 3/4 Innovators growth prospects
macroeconomic attacking 3/4 Strong management
environments existing profit pools teams highly skilled
3/4 Competitive or creating new at capital allocation
advantage markets
includes dominant
local scale,
customer
loyalty and strong
brands
------------------------ ----- ----------------------- ----- ------------------------ -----
Highest
conviction
holdings
c.2.0%
each
Total: Martin Marietta
39.0% Microsoft 3.4 Prosus 2.9 Materials 2.7
Elevance Health 3.2 Reliance Industries 2.3 CRH 2.1
Moody's 2.6 Amazon.com 2.3 Ryanair 1.9
Service Corporation
International 2.5 BHP Group 1.8
Pernod Ricard 2.3 Royalty Pharma 1.5
MasterCard 2.0
Alphabet 1.9
Arthur J. Gallagher 1.8
AIA 1.8
Average
sized holdings
c.1.0%
each
Total:
39.6% Meta Platforms 1.5 The Trade Desk 1.2 Rio Tinto 1.4
Alnylam
Olympus 1.4 Pharmaceuticals 1.2 TSMC 1.3
Prudential 1.4 The Schiehallion fund 1.2 Richemont 1.2
Shiseido 1.2 Moderna 1.0 HDFC 1.2
The Schiehallion Fund
S&P Global 1.2 - C Shares 0.9 Ping An Insurance 1.1
Analog Devices 1.1 B3 Group 0.8 Markel 1.0
Estée Lauder 1.0 Alibaba 0.8 Atlas Copco 0.9
Broadridge Financial
Solutions 0.9 Axon Enterprise 0.8 Teradyne 0.9
Adobe Systems 0.9 Shopify 0.8 Albemarle 0.9
Thermo Fisher Scientific 0.9 MercadoLibre 0.8 Charles Schwab 0.8
CoStar 0.8 Illumina 0.7 CBRE Group 0.8
SiteOne Landscape
Sysmex 0.7 Sea Limited 0.7 Supply 0.7
SMC 0.7
Booking Holdings 0.7
Eaton 0.7
Epiroc 0.7
Deutsche Boerse 0.7
Incubator
Holdings
c.0.5%
each
Total:
21.4% adidas 0.6 Genmab 0.6 Entegris 0.5
Chewy 0.5 ByteDance 0.6 Nexans 0.5
Floor & Décor
Certara 0.5 Doordash 0.6 Holdings 0.5
Topicus.com 0.4 Tesla 0.6 Pool Corporation 0.5
Hoshizaki Corp 0.3 Coupang 0.6 DENSO 0.5
Schibsted 0.6 Jet2 0.5
Epic Games 0.5 Howard Hughes 0.5
Bytes Technology Group 0.5 ASM International 0.4
Li Auto 0.5 Sands China 0.4
Netflix 0.5 Redrow 0.4
Advanced Drainage
Adyen 0.4 Systems 0.4
Snowflake 0.4 Bellway 0.4
Stripe 0.4 Ashtead Group 0.4
CyberAgent 0.4 Woodside Energy Group 0.3
Cloudflare 0.4 Persimmon 0.3
Staar Surgical 0.4 Wizz Air Holdings 0.2
ICICI Prudential Life Silk Invest Africa
Insurance 0.4 Food Fund 0.1
Midwich 0.4 Sberbank of Russia 0.0
Team 17 Group 0.3
Adevinta Asa 0.3
BIG Technologies 0.3
Meituan 0.3
Novocure 0.3
Exact Sciences 0.3
Farfetch 0.3
Spotify 0.3
Datadog 0.3
Space Exploration
Technologies 0.2
Bumble 0.2
Lemonade 0.2
Ant International 0.1
Wayfair 0.1
Illumina CVR <0.1
On the Beach <0.1
Abiomed CVR 0.0
Total 36.8 Total 30.7 Total 32.5
* Excludes net liquid assets.
Portfolio Positioning as at 30 April 2023
Thematic Exposure - Risks and Opportunities
At 30 April 2023
Category % % %
========================================= ==== ========= ==========
New Economy 37.9
========================================= ==== ========= ==========
Platform Crush (*) 10.1
Regulation/Anti-trust 10.3
Transformational Health 5.4
Transformative/ Unproven Model 2.5
Enterprise Cloud 3.5
Innovation/Chips 4.1
Other 2.0
========================================= ==== ========= ==========
Economically Agnostic 25.1
========================================= ==== ========= ==========
Highly Valued Compounders 16.3
Idiosyncratic 6.1
Insurance Cycle 2.7
Developing Economies 16.9
========================================= ==== ========= ==========
Emerging Markets Middle Classes 10.5
Emerging Markets Consumer Catch-up 6.0
Emerging Markets Financial Development 4.5
Carbon Heavy 5.4
Lending/Underwriting Risk 0.5
Industrial Demand 0.5
========================================= ==== ========= ==========
Developed Market Growth 18.4
========================================= ==== ========= ==========
Consumer Demand/Employment 5.7
Industrial Demand 6.9
Carbon Heavy 3.2
Capital Markets/Asset Inflation 2.6
Net Liquid Assets 1.7
========================================= ==== ========= ==========
Total Assets 100.0
========================================= ==== ========= ==========
* 'Platform Crush' typically refers to capital light online
companies which seek to serve multiple stakeholders via a platform
model.
Geographical *
At At
30 April 2023 30 April 2022
% %
==================== =============== ===============
North America 52.4 54.0
Continental Europe 16.3 14.5
United Kingdom 8.6 8.7
Emerging Markets 10.9 12.2
Japan 5.2 4.5
Developed Asia 4.9 4.9
==================== =============== ===============
Total Investments
Net Liquid Assets 1.7 1.2
Total Assets 100.0 100.0
==================== =============== ===============
Sectoral *
At At
30 April 2023 30 April 2022
% %
============= ============ =============== ===============
Financials 17.8 21.1
Technology 21.6 20.6
Consumer Discretionary 22.4 19.5
Healthcare 12.5 14.5
Industrials 13.3 10.6
Consumer Staples 2.3 2.0
Basic Materials 4.0 5.0
Energy 2.6 2.8
Real Estate 1.8 2.7
Total Investments
Net Liquid Assets 1.7 1.2
Total Assets 100.0 100.0
=========================== =============== ===============
* Expressed as a percentage of total assets.
For a definition of terms used see Glossary of Terms and
Alternative Performance Measures at the end of this
announcement.
List of Investments at 30 April 2023
Cumulative
Growth Fair value % of total % of total
Name Business Category GBP'000 assets assets
Equities
Software and cloud computing
Microsoft enterprise Stalwart 86,844 3.3
Elevance Health Healthcare insurer Stalwart 81,325 3.1
Prosus Media and ecommerce company Rapid 75,653 2.9
Martin Marietta
Materials Cement and aggregates manufacturer Cyclical 68,423 2.6
Moody's Credit rating agency Stalwart 65,934 2.5
Service Corporation
International Death care services Stalwart 64,047 2.4
Reliance Industries Indian energy conglomerate Rapid 60,455 2.3
Amazon.com Online retailer Rapid 59,105 2.3
Pernod Ricard Global spirits manufacturer Stalwart 58,911 2.3
CRH Diversified building materials company Cyclical 53,739 2.1 25.8
Global unlisted growth equity
The Schiehallion investment
Fund * company Rapid 29,617 1.1
Global unlisted growth equity
The Schiehallion investment
Fund C Shares * company Rapid 23,660 0.9
---------- ----------
53,277 2.0
Electronic payments network and
related
MasterCard services Stalwart 51,037 1.9
Alphabet Online search engine Stalwart 50,096 1.9
Ryanair Low cost European airline Cyclical 47,645 1.8
Arthur J. Gallagher Insurance broker Stalwart 46,797 1.8
BHP Group Mineral exploration and production Cyclical 46,004 1.8
AIA Asian life insurer Stalwart 45,226 1.7
Meta Platforms Social networking website Stalwart 38,940 1.5
Royalty Pharma Biopharmaceutical royalties portfolio Cyclical 38,551 1.5
Olympus Optoelectronic products Stalwart 36,980 1.4 43.1
Rio Tinto Global commodities businesses Cyclical 35,566 1.4
Prudential International life insurance Stalwart 34,886 1.3
TSMC Semiconductor manufacturer Cyclical 34,320 1.3
Shiseido Japanese cosmetics manufacturer Stalwart 31,965 1.2
The Trade Desk Advertising technology company Rapid 31,774 1.2
Richemont Luxury goods company Cyclical 31,746 1.2
S&P Global Global credit rating agency Stalwart 31,035 1.2
HDFC Indian mortgage provider Cyclical 31,027 1.2
Alnylam Pharmaceuticals RNA interference based biotechnology Rapid 30,514 1.2
Ping An Insurance Chinese life insurer Cyclical 29,205 1.1 55.4
Analog Devices Integrated circuits Stalwart 28,369 1.1
Estée Lauder Global cosmetic brands business Stalwart 25,992 1.0
Markets and underwrites speciality
insurance
Markel products Cyclical 25,134 1.0
Moderna Drug discovery using mRNA technology Rapid 24,947 1.0
Broadridge Financial Provides technology based solutions
Solutions to the financial services industry Stalwart 24,152 0.9
Atlas Copco Industrial equipment Cyclical 24,052 0.9
Semiconductor testing equipment
Teradyne manufacturer Cyclical 23,265 0.9
Adobe Systems Software products and technologies Stalwart 22,503 0.9
Albemarle Speciality chemicals Cyclical 22,137 0.8
Scientific instruments, consumables
Thermo Fisher Scientific and chemicals Stalwart 22,130 0.8 64.7
Charles Schwab Online savings and trading platform Cyclical 21,813 0.8
B3 Group Brazilian stock exchange operator Rapid 21,178 0.8
Alibaba Online commerce company Rapid 21,113 0.8
Manufacturer of law enforcement
Axon Enterprise devices Rapid 20,762 0.8
Shopify Online commerce platform Rapid 20,479 0.8
MercadoLibre Latin American ecommerce platform Rapid 20,021 0.8
CoStar Commercial property portal Stalwart 19,559 0.7
CBRE Group Commercial real estate operator Cyclical 19,361 0.7
SiteOne Landscape
Supply US distributor of landscaping supplies Cyclical 19,046 0.7
Producer of factory automation
SMC equipment Cyclical 18,843 0.7 72.3
Booking Holdings Online travel agency Cyclical 18,415 0.7
Eaton Industrial engineering products Cyclical 18,370 0.7
Epiroc Construction and mining machinery Cyclical 18,246 0.7
Sysmex Medical testing equipment Stalwart 17,804 0.7
Deutsche Boerse Stock exchange operator Cyclical 17,803 0.7
Illumina Gene sequencing business Rapid 17,621 0.7
Sea Limited Online and digital gaming Rapid 17,137 0.7
Genmab Biotechnology company Rapid 16,521 0.6
Online content platform including
ByteDance (U) TikTok Rapid 15,202 0.6
Doordash Online commerce platform Rapid 15,112 0.6 79.0
Electric cars and renewable energy
Tesla solutions Rapid 14,991 0.6
Coupang South Korean ecommerce Rapid 14,783 0.6
adidas Sports apparel manufacturer Stalwart 14,635 0.6
Media and classified advertising
Schibsted platforms Rapid 14,536 0.6
Epic Games (U) Gaming software developer Rapid 14,104 0.5
Supplier of materials to high-tech
Entegris industries Cyclical 13,895 0.5
Bytes Technology
Group Reseller of computer software Rapid 13,800 0.5
Chewy Online pet supplies retailer Stalwart 13,630 0.5
Li Auto Electric cars with a focus on China Rapid 13,565 0.5
Manufacturer of cables and electrical
Nexans parts Cyclical 13,468 0.5 84.4
Floor & Décor
Holdings Speciality retailer Cyclical 13,100 0.5
Certara Drug discovery and development company Stalwart 13,100 0.5
Pool Corporation Swimming pool supplies and equipment Cyclical 12,841 0.5
DENSO Automotive component supplier Cyclical 12,807 0.5
Jet2 Low cost airline Cyclical 12,250 0.5
Subscription service for TV shows and
Netflix movies Rapid 12,234 0.5
Howard Hughes US real estate developer Cyclical 11,610 0.4
Adyen Digital payments Rapid 11,454 0.4
Association of materials-centric
engineers
ASM International and scientists Cyclical 11,289 0.4
Sands China Macau casino operator Cyclical 11,012 0.4 89.0
Topicus.com Vertical market software and solutions Stalwart 10,624 0.4
Snowflake Cloud based data insight application Rapid 10,466 0.4
Redrow Housebuilding company Cyclical 10,350 0.4
Stripe (U) Payments platform Rapid 10,265 0.4
Japanese internet advertising and
CyberAgent content Rapid 10,263 0.4
Advanced Drainage Manufacturer of pipes and drainage
Systems systems Cyclical 10,179 0.4
Cloudflare Cloud based IT services business Rapid 9,919 0.4
Bellway Home construction company Cyclical 9,640 0.4
Staar Surgical Implantable contact lenses Rapid 9,499 0.4
ICICI Prudential
Life Insurance Life insurance services Rapid 9,435 0.4 93.0
Midwich Distributor of technology solutions Rapid 9,240 0.4
Ashtead Group Industrial equipment rental company Cyclical 9,154 0.3
Team 17 Group Video game developer Rapid 9,000 0.3
Media and classified advertising
Adevinta Asa platforms Rapid 8,451 0.3
BIG Technologies Electronic monitoring solutions Rapid 7,980 0.3
Meituan Online commerce platform Rapid 7,760 0.3
Biotechnology company focusing on
solid
Novocure tumour treatment Rapid 7,643 0.3
Exact Sciences Cancer detection and treatment Rapid 7,642 0.3
Commercial kitchen equipment
Hoshizaki Corp manufacturer Stalwart 7,597 0.3
Woodside Energy
Group Australian gas and oil company Cyclical 6,834 0.3 96.1
Farfetch Online fashion retailer Rapid 6,766 0.3
Spotify Online music streaming service Rapid 6,754 0.3
Persimmon Housebuilding company Cyclical 6,570 0.3
Cloud based IT system monitoring
Datadog application Rapid 6,539 0.2
Wizz Air Holdings Low-cost East European airline Cyclical 6,419 0.2
Space Exploration
Technologies (U) Space rockets and satellites Rapid 6,126 0.2
Bumble Dating application Rapid 5,223 0.2
Lemonade Data and insurance company Rapid 4,475 0.2
Ant International Chinese online payments and financial
(U) services business Rapid 3,782 0.1
Silk Invest Africa
Food Fund (U) Africa focused private equity fund Cyclical 3,658 0.1 98.2
Wayfair Online home furnishings business Rapid 3,159 0.1
Illumina CVR (U) Gene sequencing business Rapid 1,281 <0.1
On the Beach Web search interface provider Rapid 497 <0.1
Sberbank of Russia Russian commercial bank Cyclical - 0.0
Abiomed CVR Medical implant manufacturer Rapid - 0.0
------------------------- -------------------------------------- ---------- ---------- ---------- -----------
Total Investments 2,574,408 98.3 98.3
Net Liquid Assets
# 43,330 1.7
----------------------------------------------------------------------------- ---------- ---------- -----------
Total Assets # 2,617,738 100.0 100.0
----------------------------------------------------------------- ---------- ---------- ---------- -----------
* The Schiehallion Fund is managed by Baillie Gifford. The
Company's holdings in The Schiehallion Fund are excluded from its
assets when calculating the management fee.
See note 3 to the Financial Statements. The ordinary and C share
portfolios of The Schiehallion Fund are managed as distinct
investment pools, until such time as the C shares are converted
into ordinary shares.
(U) Denotes unlisted (private company) investment.
Suspended investment.
# For a definition of terms used see Glossary of Terms and
Alternative Performance Measures at the end of this
announcement.
Unlisted
Listed Schiehallion securities Net liquid Total
equities Fund ++ assets # assets #
% % % % %
========= ============ ========================== ========== =========
30 April 2023 94.4 2.0 1.9 1.7 100.0
============== ========= ============ ========================== ========== =========
30 April 2022 92.2 4.4 2.2 1.2 100.0
============== ========= ============ ========================== ========== =========
Figures represent percentage of total assets.
# For a definition of terms used see Glossary of Terms and
Alternative Performance Measures at the end of this
announcement.
++ Includes holdings in preference shares, ordinary shares and
contingent value rights (CVR).
Baillie Gifford's Approach to Valuing Private Companies
Baillie Gifford holds private company investments at 'fair
value' i.e., the price that would be paid in an open-market
transaction. Valuations are adjusted both during regular valuation
cycles and on an ad hoc basis in response to 'trigger events'. Our
valuation process ensures that private companies are valued in both
a fair and timely manner.
The valuation process is overseen by a valuations committee at
Baillie Gifford which takes advice from an independent third party
(S&P Global). The valuations committee is independent from the
portfolio managers as well as Baillie Gifford's Private Companies
Specialist team, with all voting members being from different
operational areas of the firm, and the portfolio managers only
receive final valuation notifications once they have been
applied.
We revalue the private holdings on a three-month rolling cycle,
with one-third of the holdings reassessed each month. The prices
are also reviewed twice per year by the Monks Board and are subject
to the scrutiny of external auditors in the annual audit
process.
Beyond the regular cycle, the valuations committee also monitors
the portfolio for certain 'trigger events'. These may include
changes in fundamentals, a takeover approach, an intention to carry
out an Initial Public Offering 'IPO', company news which is
identified by the valuation team or by the portfolio managers, or
changes to the valuation of comparable public companies.
The valuations committee also monitors relevant market indices
on a weekly basis and updates valuations in a manner consistent
with our external valuer's (S&P Global) most recent valuation
report where appropriate. When market volatility is particularly
pronounced the team undertakes these checks daily. Any ad hoc
change to the fair valuation of any holding is implemented swiftly
and reflected in the next published net asset value. There is no
delay.
The Independent Auditor's Report in the Company's Annual Report
and Financial Statements explains the procedures carried out by the
external auditor on the private companies (unquoted investments) as
part of their audit.
The Monks Investment Trust*
-------------------------------------------------- ----
Instruments valued 9
Revaluations performed 61
Percentage of private company portfolio revalued
4+ times 89%
Percentage of private company portfolio revalued
6+ times 67%
-------------------------------------------------- ----
* Data reflecting period 1 May 2022 to 30 April 2023 to align
with the Company's reporting period end.
During the year, most revaluations have been decreases given
prevailing market conditions. The average movement in both
valuation and share price for all private company investments is
shown below.
Average Average
movement movement
in investee in investee
company company
valuation share price
---------------------- ------------- -------------
Instruments valued * (19%) (15%)
---------------------- ------------- -------------
* Data reflecting period 1 May 2022 - 30 April 2023 to align
with the Company's reporting period end .
Private company share prices have decreased slightly less than
headline valuations, because Monks holds preference stock, which
provides some downside protection.
The share price movement reflects a probability-weighted average
of the regular valuation that would be realised in an IPO, and the
downside protected valuation that would normally be triggered in
the event of a corporate sale or liquidation.
Fair value % of total
at assets
30 April
2023
Name Instrument GBP'000
============================================ ====================== ========== ==========
ByteDance Series E-1 Preference 15,202 0.6
Epic Games Common Stock 14,104 0.5
Stripe Class B Common 1,607
Stripe Series H Preference 1,004
Stripe Series I Preference 7,654
==========
10,265 0.4
Space Exploration Technologies Class A Common 4,682
Space Exploration Technologies Class C Common 1,444
==========
6,126 0.2
Ant International Class C Ordinary 3,782 0.1
Silk Invest Africa Food Fund Class A Ordinary 3,658 0.1
============================================ ====================== ========== ==========
Total private company investments 53,137 1.9
==================================================================== ========== ==========
Illumina CVR* 1,281 <0.1
============================================ ====================== ========== ==========
Total unlisted investments 54,418 1.9
==================================================================== ========== ==========
The Schiehallion Fund (diversified private
company exposure) Ordinary and C Shares 53,277 2.0
============================================ ====================== ========== ==========
Total direct and indirect unlisted exposure 107,695 3.9
==================================================================== ========== ==========
* Unlisted security in a listed investment, arising from a
private company transaction (Grail).
Income Statement
For the year ended 30 April
2023 2023 2023 2022 2022 2022
Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================================== ===== ======== ======== ======== ======== ========= =========
Losses on investments - (78,421) (78,421) - (631,829) (631,829)
Currency gains/(losses) - 293 293 - (308) (308)
Income 2 30,211 - 30,211 27,811 - 27,811
Investment management fee 3 (8,878) - (8,878) (10,465) - (10,465)
Other administrative expenses (1,833) - (1,833) (1,888) - (1,888)
================================== ===== ======== ======== ======== ======== ========= =========
Net return before finance costs
and taxation 19,500 (78,128) (58,628) 15,458 (632,137) (616,679)
================================== ===== ======== ======== ======== ======== ========= =========
Finance costs of borrowings (7,225) - (7,225) (5,298) - (5,298)
================================== ===== ======== ======== ======== ======== ========= =========
Net return on ordinary activities
before taxation 12,275 (78,128) (65,853) 10,160 (632,137) (621,977)
================================== ===== ======== ======== ======== ======== ========= =========
Tax on ordinary activities (1,561) (430) (1,991) (1,516) 293 (1,223)
================================== ===== ======== ======== ======== ======== ========= =========
Net return on ordinary activities
after taxation 10,714 (78,558) (67,844) 8,644 (631,844) (623,200)
================================== ===== ======== ======== ======== ======== ========= =========
Net return per ordinary share 4 4.70p (34.47p) (29.77p) 3.67p (268.58p) (264.91p)
================================== ===== ======== ======== ======== ======== ========= =========
Note:
Dividends per share paid and
payable in respect of the year 5 3.15p 2.35p
================================== ===== ======== ======== ======== ======== ========= =========
The total column of this statement is the profit and loss
account of the Company. The supplementary revenue and capital
return columns are prepared under guidance published by the
Association of Investment Companies.
All revenue and capital items in this statement derive from
continuing operations.
A Statement of Comprehensive Income is not required as the
Company does not have any other comprehensive income and the net
return on ordinary activities after taxation is both the profit and
total comprehensive income for the period.
Balance Sheet
As at 30 April
2023 2023 2022 2022
Notes GBP'000 GBP'000 GBP'000 GBP'000
======================================= ===== ======== ========= ========= =========
Fixed assets
Investments held at fair value through
profit or loss 6 2,574,408 2,662,015
======================================= ===== ======== ========= ========= =========
Current assets
Debtors 20,441 8,072
Cash and cash equivalents 42,191 35,879
======================================= ===== ======== ========= ========= =========
62,632 43,951
======================================= ===== ======== ========= ========= =========
Creditors
Amounts falling due within one year 7 (93,142) (126,257)
======================================= ===== ======== ========= ========= =========
Net current liabilities (30,510) (82,306)
======================================= ===== ======== ========= ========= =========
Total assets less current liabilities 2,543,898 2,579,709
======================================= ===== ======== ========= ========= =========
Creditors and Provisions
Amounts falling due after more than
one year:
Loan notes 7 (99,858) (99,853)
Provision for tax liability 7 (1,160) (692)
======================================= ===== ======== ========= ========= =========
(101,018) (100,545)
======================================= ===== ======== ========= ========= =========
2,442,880 2,479,164
======================================= ===== ======== ========= ========= =========
Capital and reserves
Share capital 8 12,659 11,823
Share premium account 8 433,714 262,183
Capital redemption reserve 8,700 8,700
Capital reserve 8 1,915,385 2,129,483
Revenue reserve 72,422 66,975
======================================= ===== ======== ========= ========= =========
Shareholders' funds 2,442,880 2,479,164
======================================= ===== ======== ========= ========= =========
Shareholders' funds per ordinary share 1,058.5p 1,089.0p
(borrowings at book value)
======================================= ===== ======== ========= ========= =========
* See Glossary of Terms and Alternative Performance Measures at the end of this announcement.
The accompanying notes on the following pages are an integral
part of the Financial Statements
Statement of Changes in Equity
For the year ended 30 April 2023
Share Capital
Share premium redemption Capital Revenue Shareholders'
capital account reserve reserve reserve funds
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=========================== ===== ======== ======== =========== ========= ======== =============
Shareholders' funds at
1 May 2022 11,823 262,183 8,700 2,129,483 66,975 2,479,164
Net return on ordinary
activities after taxation - - - (78,558) 10,714 (67,844)
Ordinary shares bought
back 8 - - - (135,221) - (135,221)
Ordinary shares issued 8 836 171,531 - (319) - 172,048
Dividends paid during
the year 5 - - - - (5,267) (5,267)
=========================== ===== ======== ======== =========== ========= ======== =============
Shareholders' funds at
30 April 2023 12,659 433,714 8,700 1,915,385 72,422 2,442,880
=========================== ===== ======== ======== =========== ========= ======== =============
For year ended 30 April 2023
Share Capital
Share premium redemption Capital Revenue Shareholders'
capital account reserve reserve reserve funds
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=========================== ======== ======== =========== ========= ======== =============
Shareholders' funds at
1 May 2021 11,823 262,183 8,700 2,859,214 63,060 3,204,980
Net return on ordinary
activities after taxation - - - (631,844) 8,644 (623,200)
Ordinary shares bought
back 8 - - - (97,887) - (97,887)
Dividends paid during
the year 5 - - - - (4,729) (4,729)
=========================== ======== ======== =========== ========= ======== =============
Shareholders' funds at
30 April 2022 11,823 262,183 8,700 2,129,483 66,975 2,479,164
=========================== ======== ======== =========== ========= ======== =============
* The Capital Reserve balance at 30 April 2023 includes holding
gains on investments of GBP660,579,000 (30 April 2022 - gains of
GBP723,323,000).
The accompanying notes on the following pages are an integral
part of the Financial Statements.
Cash Flow Statement
For the year ended 30 April
2023 2023 2022 2022
Notes GBP'000 GBP'000 GBP'000 GBP'000
=========================================== ===== ========= ========= ========= =========
Cash flows from operating activities
Net return on ordinary activities
before taxation (65,853) (621,977)
Net losses on investments 78,421 631,829
Currency (gains)/losses (293) 308
Finance costs of borrowings 7,225 5,298
Overseas tax incurred (1,575) (1,586)
(Increase)/decrease in accrued income (70) 355
(Increase)/decrease in debtors (513) 347
Decrease in creditors (357) (250)
=========================================== ===== ========= ========= ========= =========
Cash from operations * 16,985 14,324
Interest paid (7,402) (4,991)
=========================================== ===== ========= ========= ========= =========
Net cash inflow from operating activities 9,583 9,333
=========================================== ===== ========= ========= ========= =========
Cash flows from investing activities
Acquisitions of investments (255,559) (484,720)
Disposals of investments 361,027 424,157
=========================================== ===== ========= ========= ========= =========
Net cash inflow/(outflow) from investing
activities 105,468 (60,563)
=========================================== ===== ========= ========= ========= =========
Cash flows from financing activities
Equity dividends paid 5 (5,267) (4,729)
Ordinary shares bought back and stamp
duty thereon 8 (135,014) (91,577)
Ordinary shares issued 8 71,249 -
Debenture repaid (40,000) -
Borrowings drawn down - 75,000
=========================================== ===== ========= ========= ========= =========
Net cash outflow from financing activities (109,032) (21,306)
=========================================== ===== ========= ========= ========= =========
Increase/(decrease) in cash and cash
equivalents 6,019 (72,536)
Exchange movements 293 (308)
Cash and cash equivalents at 1 May 35,879 108,723
=========================================== ===== ========= ========= ========= =========
Cash and cash equivalents at 30 April 42,191 35,879
=========================================== ===== ========= ========= ========= =========
* Cash from operations includes dividends received of
GBP29,285,000 (30 April 2022 - GBP28,165,000) and interest received
of GBP856,000 (30 April 2022 - GBP1,000).
The accompanying notes are an integral part of the Financial
Statements.
Notes to the Financial Statements
1. The Financial Statements for the year to 30 April 2023 have
been prepared in accordance with FRS 102, 'The Financial Reporting
Standard applicable in the UK and Republic of Ireland' and on the
basis of the accounting policies set out in the Annual Report and
Financial Statements which are unchanged from the prior year and
have been applied consistently.
2. Income
2023 2022
GBP'000 GBP'000
========================================================= ======== ========
Income from investments
UK dividends 4,688 10,519
Overseas dividends 24,667 17,291
========================================================= ======== ========
Other Income 29,355 27,810
Deposit Interest 856 1
========================================================= ======== ========
Total Income 30,211 27,811
========================================================= ======== ========
Total income comprises:
Dividends from financial assets designated at fair value
through profit or loss 29,355 27,810
Interest from financial assets not at fair value through
profit or loss 856 1
========================================================= ======== ========
30,211 27,811
========================================================= ======== ========
Special dividend entitlements arising in the year amounted to
GBP684,000 (2022 - GBP2,526,000) with GBP492,000 (2022 -
GBP2,393,000) classified as revenue and GBP192,000 (2022 -
GBP133,000) classified as capital.
3. Baillie Gifford & Co Limited, a wholly owned subsidiary
of Baillie Gifford & Co, has been appointed as the Company's
Alternative Investment Fund Manager (AIFM) and Company Secretary.
Baillie Gifford & Co Limited has delegated portfolio management
services to Baillie Gifford & Co. Dealing activity and
transaction reporting have been further sub-delegated to Baillie
Gifford Overseas Limited and Baillie Gifford Asia (Hong Kong)
Limited. The annual management fee payable to Baillie Gifford &
Co Limited is 0.45% on the first GBP750 million of total assets,
0.33% on the next GBP1 billion of total assets and 0.30% on the
remaining total assets. For fee purposes, total assets is defined
as the total value of all assets held less all liabilities (other
than any liability in the form of debt intended for investment
purposes) and excludes the value of the Company's holdings in The
Schiehallion Fund, a closed-ended investment company managed by
Baillie Gifford & Co. The Company does not currently hold any
other collective investment vehicles managed by Baillie Gifford
& Co. Where the Company holds investments in open-ended
collective investment vehicles managed by Baillie Gifford, such as
OEICs, Monks' share of any fees charged within that vehicle will be
rebated to the Company. All debt drawn down during the periods
under review is intended for investment purposes. For the quarters
to 31 January 2023 and 30 April 2023, the assets subject to
management fee excluded the GBP173 million rolled into the Company
from The Independent Investment Trust PLC in accordance with the
terms of the transaction as set out in the Prospectus published 6
October 2022, more detail of which is provided in note 13 Share
Capital and note 14 Capital and Reserves in the Annual Report and
Financial Statements.
4. Net Return Per Ordinary Share
2023 2023 2023 2022 2022 2022
Revenue Capital Total Revenue Capital Total
======================== ======== ======== ======== ======== ========= =========
Net return per ordinary
share 4.70p (34.47p) (29.77p) 3.67p (268.58p) (264.91p)
======================== ======== ======== ======== ======== ========= =========
Revenue return per ordinary share is based on the net revenue
return on ordinary activities after taxation of GBP10,714,000 (2022
- GBP8,644,000) and on 227,887,889 (2022 - 235,252,716) ordinary
shares of 5p, being the weighted average number of ordinary shares
in issue during the year.
Capital return per ordinary share is based on the net capital
loss for the financial year of GBP78,558,000 (2022 - loss of
GBP631,844,000) and on 227,887,889 (2022 - 235,252,716) ordinary
shares, being the weighted average number of ordinary shares in
issue during the year.
There are no dilutive or potentially dilutive shares in
issue.
5. Ordinary Dividends
2023 2022
2023 2022 GBP'000 GBP'000
========================================= ===== ===== ======== ========
Amounts recognised as distributions in
the year:
Previous year's final (paid 9 September
2022) 2.35p 2.00p 5,267 4,729
========================================= ===== ===== ======== ========
We also set out below the total dividends paid and proposed in
respect of the financial year, which is the basis on which the
requirements of section 1158 of the Corporation Tax Act 2010 are
considered. The revenue available for distribution by way of
dividend for the year is GBP10,714,000 (2022 - GBP8,644,000).
2023 2022
2023 2022 GBP'000 GBP'000
========================================= ===== ===== ======== ========
Amounts paid and payable in respect of
the financial year:
Proposed final (payable 13 September
2023) 3.15p 2.35p 7,270 5,267
========================================= ===== ===== ======== ========
If approved, the recommended final dividend on the ordinary
shares will be paid on 13 September 2023 to shareholders on the
register at the close of business on 28 July 2023. The ex-dividend
date is 27 July 2023. The Company's Registrar offers a Dividend
Reinvestment Plan and the final date for elections for this
dividend is 17 August 2023.
6. Fixed Assets - Investments
Level Level Level
1 2 3 Total
As at 30 April 2023 GBP'000 GBP'000 GBP'000 GBP'000
================================== ========= ======== ======== =========
Listed and suspended equities 2,466,713 53,277 - 2,519,990
Unlisted securities - - 54,418 54,418
================================== ========= ======== ======== =========
Total financial asset investments 2,466,713 53,277 54,418 2,574,408
================================== ========= ======== ======== =========
Level Level Level
1 2 3 Total
As at 30 April 2022 GBP'000 GBP'000 GBP'000 GBP'000
================================== ========= ======== ======== =========
Listed and suspended equities 2,479,464 120,306 5,636 2,605,406
Unlisted securities - - 56,609 56,609
================================== ========= ======== ======== =========
Total financial asset investments 2,479,464 120,306 62,245 2,662,015
================================== ========= ======== ======== =========
Investments in securities are financial assets held at fair
value through profit or loss. In accordance with Financial
Reporting Standard 102, the tables above provide an analysis of
these investments based on the fair value hierarchy described
below, which reflects the reliability and significance of the
information used to measure their fair value. During the year, the
previously Level 3 suspended investment in Brilliance China
Automotive was sold and Stripe Series I Preference Shares were
acquired. Level 2 investments comprise the ordinary and C share
holdings in The Schiehallion Fund. The suspended investment in
Sberbank of Russia has been valued at nil.
The fair value hierarchy used to analyse the basis on which the
fair values of financial instruments held at fair value through the
profit and loss account are measured is described below. Fair value
measurements are categorised on the basis of the lowest level input
that is significant to the fair value measurement.
Level 1 - using unadjusted quoted prices for identical
instruments in an active market;
Level 2 - using inputs, other than quoted prices included within
Level 1, that are directly or indirectly observable (based on
market data); and
Level 3 - using inputs that are unobservable (for which market
data is unavailable).Unlisted Investments
Private Company Investments
Private company investments are valued at fair value by the
Directors following a detailed review and appropriate challenge of
the valuations proposed by the Managers. The Managers' private
company investment policy applies techniques consistent with the
International Private Equity and Venture Capital Valuation
Guidelines 2018 ('IPEV'). The techniques applied are predominantly
market- based approaches. The market-based approaches available
under IPEV are set out below and are followed by an explanation of
how they are applied to the Company's private company
portfolio:
3/4 Multiples;
3/4 Industry Valuation Benchmarks; and
3/4 Available Market Prices.
The nature of the private company portfolio currently will
influence the valuation technique applied. The valuation approach
recognises that, as stated in the IPEV Guidelines, the price of a
recent investment, if resulting from an orderly transaction,
generally represents fair value as at the transaction date and may
be an appropriate starting point for estimating fair value at
subsequent measurement dates. However, consideration is given to
the facts and circumstances as at the subsequent measurement date,
including changes in the market or performance of the investee
company. Milestone analysis is used where appropriate to
incorporate the operational progress of the investee company into
the valuation. Additionally, the background to the transaction must
be considered. As a result, various multiples-based techniques are
employed to assess the valuations particularly in those companies
with established revenues. Discounted cashflows are used where
appropriate. An absence of relevant industry peers may preclude the
application of the Industry Valuation Benchmarks technique and an
absence of observable prices may preclude the Available Market
Prices approach. All valuations are cross-checked for
reasonableness by employing relevant alternative techniques.
The private company investments are valued according to a three
monthly cycle of measurement dates. The fair value of the private
company investments will be reviewed before the next scheduled
three monthly measurement date on the following occasions:
3/4 at the year end and half year end of the Company; and
3/4 where there is an indication of a change in fair value as
defined in the IPEV guidelines (commonly referred to as 'trigger'
events).
7. Creditors and Provisions include the following:
Borrowing facilities
At 30 April 2023 the Company had a 3 year GBP150 million
unsecured floating rate revolving facility with National Australia
Bank Limited, which expires on 29 November 2024.
At 30 April 2023 drawings were as follows:
3/4 National Australia Bank Limited: GBP75 million at an
interest rate of 1.4% over SONIA, maturing in September 2023 (2022
- GBP75 million at an interest rate of 1.4% over SONIA, being GBP50
million maturing in August 2022 and GBP25 million maturing in
September 2022).
The main covenants relating to the above loans are that total
borrowings shall not exceed 30% of the Company's adjusted net asset
value and the Company's minimum adjusted net asset value shall be
GBP650 million.
There were no breaches of loan covenants during the year to 30
April 2023 (2022 - none).
Debenture Stock
The GBP40 million 6 3/8 % debenture stock 2023 was repaid at par
on 1 March 2023, in accordance with its terms.
Unsecured Loan Notes
The unsecured loan notes are stated at the cumulative amount of
net proceeds after issue expenses. The cumulative effect is to
reduce the carrying amount of borrowing by GBP142,000 (2022 -
GBP147,000).
Provision for Tax Liability
The deferred tax liability provision at 30 April 2023 of
GBP1,160,000 (30 April 2022 - GBP692,000) relates to a potential
liability for Indian capital gains tax that may arise on the
Company's Indian investments should they be sold in the future,
based on the net unrealised taxable capital gain at the period end
and on enacted Indian tax rates. The amount of any future tax
amounts payable may differ from this provision, depending on the
value and timing of any future sales of such investments and future
Indian tax rates.
8. Share Capital
2023 2023 2022 2022
Number GBP'000 Number GBP'000
------------------------------------ ----------- -------- ------------ --------
Allotted, called up and fully paid
ordinary shares of 5p each 230,796,666 11,540 227,645,309 11,382
Treasury shares of 5p each 22,374,794 1,119 8,808,550 441
------------------------------------ ----------- -------- ------------ --------
Total 253,171,460 12,659 236,453,859 11,823
------------------------------------ ----------- -------- ------------ --------
The Company's authority permits it to hold shares bought back
'in treasury'. Such treasury shares may be subsequently either sold
for cash (at, or at a premium to, net asset value per ordinary
share) or cancelled. In the year to 30 April 2023, 13,566,244
shares with a nominal value of GBP678,000 were bought back at a
total cost of GBP135,221,000 to be held in treasury (2022 -
8,808,550 ordinary shares with a nominal value of GBP441,000 were
bought back at a total cost of GBP97,887,000). No shares were
issued from treasury during the year and at 30 April 2023
22,374,794 (2022 - 8,808,550) shares were held in treasury.
16,717,601 new shares in the Company were issued to former
shareholders of The Independent Investment Trust PLC in accordance
with the Scheme of Reconstruction as noted in more detail in note
14 Capital and Reserves in the Annual Report and Financial
Statements. At 30 April 2023 the Company had authority to buy back
26,548,989 ordinary shares and to allot or sell from treasury
22,480,758 ordinary shares without application of pre-emption
rights. Under the provisions of the Company's Articles of
Association share buy-backs are funded from the capital
reserve.
9. The financial information set out above does not constitute
the Company's statutory accounts for the years ended 30 April 2023
or 2022 but is derived from those accounts. Statutory accounts for
2022 have been delivered to the Registrar of Companies and those
for 2023 will be delivered in due course. The auditor has reported
on these accounts; the reports were (i) unqualified, (ii) did not
include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying their report, and
(iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006.
10. Transactions with Related Parties and the Managers and Secretaries
No Director has a contract of service with the Company. During
the year no Director was interested in any contract or other matter
requiring disclosure under section 412 of the Companies Act
2006.
Details of the management fee arrangements are included in note
3 above.
11. The Annual Report and Financial Statements will be available on the Managers' website www.monksinvestmenttrust.co.uk (++) on or around 11 July 2022.
++ Neither the contents of the Managers' website nor the
contents of any website accessible from hyperlinks on the Managers'
website (or any other website) is incorporated into, or forms part
of, this announcement.
None of the views expressed in this document should be construed
as advice to buy or sell a particular investment.
Glossary of Terms and Alternative Performance Measures (APM)
An alternative performance measure is a financial measure of
historical or future financial performance, financial position, or
cash flows,
other than a financial measure defined or specified in the
applicable financial reporting framework.
Total Assets
This is the Company's definition of Adjusted Total Assets, being
the total of all assets less current liabilities and provisions,
before deduction of all borrowings.
Shareholders' Funds
Shareholders' Funds is the value of all assets held less all
liabilities, with borrowings deducted at book cost.
Net Asset Value (APM)
Net Asset Value (NAV) is the value of all assets held less all
liabilities, with borrowings deducted at either par value or fair
value as described below. Per share amounts are calculated by
dividing the relevant figure by the number of ordinary shares in
issue.
Net Asset Value (Borrowings at Par Value) (APM)
Borrowings are valued at nominal par value.
A reconciliation from shareholders' funds (borrowings at book
value) to net asset value after deducting borrowings at par value
is provided below:
2023 2023 2022 2022
GBP'000 per share GBP'000 per share
========================================== ========= ========== ========= ==========
Shareholders' funds (borrowings at book
value) 2,442,880 1,058.5p 2,479,164 1,089.0p
Add: book value of borrowings 174,858 75.8p 214,826 94.4p
Less: par value of borrowings (175,000) (75.8p) (215,000) (94.4p)
========================================== ========= ========== ========= ==========
Net asset value (borrowings at par value) 2,442,738 1,058.5p 2,478,990 1,089.0p
========================================== ========= ========== ========= ==========
The per share figures above are based on 230,796,666 (2022 -
227,645,309) ordinary shares of 5p, being the number of ordinary
shares in issue at the period end excluding treasury shares.
Net Asset Value (Borrowings at Fair Value) (APM)
Borrowings are valued at an estimate of market worth. The fair
values of the loan notes are calculated using a comparable debt
approach, by reference to a basket of corporate debt. The fair
value of the Company's short term bank borrowings is equivalent to
its book value.
A reconciliation from shareholders' funds (borrowings at book
value) to net asset value after deducting borrowings at fair value
is provided below.
2023 2023 2022 2022
GBP'000 per share GBP'000 per share
=========================================== ========= ========== ========= ==========
Shareholders' funds (borrowings at book
value) 2,442,880 1,058.5p 2,479,164 1,089.0p
Add: book value of borrowings 174,858 75.8p 214,826 94.4p
Less: fair value of borrowings (125,404) (54.3p) (190,308) (83.6p)
=========================================== ========= ========== ========= ==========
Net asset value (borrowings at fair value) 2,492,334 1,080.0p 2,503,682 1,099.8p
=========================================== ========= ========== ========= ==========
The per share figures above are based on 230,796,666 (2022 -
227,645,309) ordinary shares of 5p, being the number of ordinary
shares in issue at the period end excluding treasury shares.
Discount/Premium (APM)
As stock markets and share prices vary, an investment trust's
share price is rarely the same as its NAV. When the share price is
lower than the NAV per share it is said to be trading at a
discount. The size of the discount is calculated by subtracting the
share price from the NAV per share and is usually expressed as a
percentage of the NAV per share. If the share price is higher than
the NAV per share, this situation is called a premium.
2023 2022
============================================== ======== ======== =======================
Closing NAV per share (borrowings at par) a 1,058.5p 1,089.0p
Closing NAV per share (borrowings at fair
value) b 1,080.0p 1,099.8p
Closing share price c 975.0p 1,051.0p
============================================== ======== ======== =======================
(c-a)
÷
Discount to NAV with borrowings at par a (7.9%) (3.5%)
============================================== ======== ======== =======================
(c-b)
÷
Discount to NAV with borrowings at fair value b (9.7%) (4.4%)
============================================== ======== ======== =======================
Net Liquid Assets
Net liquid assets comprise current assets less current
liabilities (excluding borrowings) and provisions for deferred
liabilities.
Active Share (APM)
Active share, a measure of how actively a portfolio is managed,
is the percentage of the listed equity portfolio that differs from
its comparative index. It is calculated by deducting from 100 the
percentage of the portfolio that overlaps with the comparative
index. An active share of 100 indicates no overlap with the index
and an active share of zero indicates a portfolio that tracks the
index.
Unlisted, Unquoted and Private Company Investments
'Unlisted', 'Unquoted' and 'Private Company' investments are
investments in securities not traded on a recognised exchange.
Total Return (APM)
The total return is the return to shareholders after reinvesting
the net dividend on the date that the share price goes ex-dividend,
as detailed below.
2023 2023 2023 2022 2022 2022
NAV NAV Share NAV NAV Share
(par) (fair) Price (par) (fair) Price
===================================== ========== ======== ======== ======== ======== ======== ========
Closing NAV per share/share
price a 1,058.5p 1,080.0p 975.0p 1,089.0p 1,099.8p 1,051.0p
Dividend adjustment factor
* b 1.0021 1.0021 1.0023 1.0015 1.0015 1.0014
c =
Adjusted closing NAV per share/share a x
price b 1,060.7p 1,082.3p 977.3p 1,090.6p 1,101.4p 1,052.5p
Opening NAV per share/share
price d 1,089.0p 1,099.8p 1,051.0p 1,355.3p 1,358.1p 1,396.0p
===================================== ========== ======== ======== ======== ======== ======== ========
(c ÷
Total return d)-1 (2.6%) (1.6%) (7.0%) (19.5%) (18.9%) (24.6%)
===================================== ========== ======== ======== ======== ======== ======== ========
* The dividend adjustment factor is calculated on the assumption
that the dividend of 2.35p (2022 - 2.00p) paid by the Company
during the period was reinvested into shares of the Company at the
cum income NAV at the ex-dividend date.
Ongoing Charges (APM)
The total expenses (excluding dealing and borrowing costs)
incurred by the Company as a percentage of the daily average net
asset value (with borrowings at fair value), as detailed below.
2023 2022
================================================== ========= ================ ================
Investment management fee GBP8,878,000 GBP10,465,000
Other administrative expenses GBP1,833,000 GBP1,888,000
Total expenses a GBP10,711,000 GBP12,353,000
Average net asset value (with borrowings deducted
at fair value) b GBP2,480,229,000 GBP3,114,257,000
================================================== ========= ================ ================
a ÷
Ongoing charges b 0.43% 0.40%
================================================== ========= ================ ================
Gearing (APM)
At its simplest, gearing is borrowing. Just like any other
public company, an investment trust can borrow money to invest in
additional investments for its portfolio. The effect of the
borrowing on the shareholders' assets is called 'gearing'. If the
Company's assets grow, the shareholders' assets grow
proportionately more because the debt remains the same. But if the
value of the Company's assets falls, the situation is reversed.
Gearing can therefore enhance performance in rising markets but can
adversely impact performance in falling markets. The level of
gearing can be adjusted through the use of derivatives which affect
the sensitivity of the value of the portfolio to changes in the
level of markets.
Gross gearing, also referred to as potential gearing is the
Company's borrowings expressed as a percentage of shareholders'
funds (a ÷ c in the table below).
Net gearing, also referred to as invested gearing is borrowings
at book value less cash and cash equivalents (any certificates of
deposit are not deducted) and brokers' balances expressed as a
percentage of shareholders' funds (b ÷ c in the table below)*.
Effective gearing, as defined by the Board and Managers of
Monks, is the Company's borrowings at par less cash, brokers'
balances and investment grade bonds maturing within one year,
expressed as a percentage of shareholders' funds*.
* As adjusted to take into account the gearing impact of any derivative holdings.
2023 2022
------------------------------------------ ---- ---------------- ----------------
Borrowings (at book cost) a GBP174,858,000 GBP214,826,000
Less: cash and cash equivalents (GBP42,191,000) (GBP35,879,000)
Less: sales for subsequent settlement (GBP16,520,000) (GBP4,741,000)
Add: purchases for subsequent settlement GBP14,456,000 GBP7,045,000
------------------------------------------ ---- ---------------- ----------------
Adjusted borrowings b GBP130,693,000 GBP181,251,000
Shareholders' funds c GBP2,442,880,000 GBP2,479,164,000
------------------------------------------ ---- ---------------- ----------------
Gross (potential) gearing a/c 7.2% 8.7%
------------------------------------------ ---- ---------------- ----------------
Net (invested) gearing b/c 5.3% 7.3%
------------------------------------------ ---- ---------------- ----------------
Leverage (APM)
For the purposes of the Alternative Investment Fund Managers
(AIFM) Regulations leverage is any method which increases the
Company's exposure, including the borrowing of cash and the use of
derivatives. It is expressed as a ratio between the Company's
exposure and its net asset value and can be calculated on a gross
and a commitment method. Under the gross method, exposure
represents the sum of the Company's positions after the deduction
of sterling cash balances, without taking into account any hedging
and netting arrangements. Under the commitment method, exposure is
calculated without the deduction of sterling cash balances and
after certain hedging and netting positions are offset against each
other.
Compound Annual Return (APM)
The compound annual return converts the return over a period of
longer than one year to a constant annual rate of return applied to
the compounded value at the start of each year.
Treasury Shares
The Company has the authority to make market purchases of its
ordinary shares for retention as treasury shares for future
reissue, resale, transfer, or for cancellation. Treasury shares do
not receive distributions and the Company is not entitled to
exercise the voting rights attaching to them.
Turnover (APM)
Turnover is a measure of portfolio change or trading activity.
Monthly turnover is calculated as the minimum of purchases and
sales in a month, divided by the average market value of the fund.
Monthly numbers are added together to get the rolling 12 month
turnover data.
None of the views expressed in this document should be construed
as advice to buy or sell a particular investment.
++ Neither the contents of the Managers' website nor the
contents of any website accessible from hyperlinks on the Managers'
website (or any other website) is incorporated into, or forms part
of, this announcement.
Third Party Data Provider Disclaimer
No third party data provider ('Provider') makes any warranty,
express or implied, as to the accuracy, completeness or timeliness
of the data contained herewith nor as to the results to be obtained
by recipients of the data.
No Provider shall in any way be liable to any recipient of the
data for any inaccuracies, errors or omissions in the index data
included in this document, regardless of cause, or for any damages
(whether direct or indirect) resulting therefrom.
No Provider has any obligation to update, modify or amend the
data or to otherwise notify a recipient thereof in the event that
any matter stated herein changes or subsequently becomes
inaccurate.
Without limiting the foregoing, no Provider shall have any
liability whatsoever to you, whether in contract (including under
an indemnity), in tort (including negligence), under a warranty,
under statute or otherwise, in respect of any loss or damage
suffered by you as a result of or in connection with any opinions,
recommendations, forecasts, judgements, or any other conclusions,
or any course of action determined, by you or any third party,
whether or not based on the content, information or materials
contained herein.
FTSE Index Data
London Stock Exchange Group plc and its group undertakings
(collectively, the 'LSE Group'). (c) LSE Group 2023. FTSE Russell
is a trading name of certain of the LSE Group companies. 'FTSE(R)'
'Russell(R)', FTSE Russell (R), are a trade marks of the relevant
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Neither LSE Group nor its licensors accept any liability for any
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No further distribution of data from the LSE Group is permitted
without the relevant LSE Group company's express written consent.
The LSE Group does not promote, sponsor or endorse the content of
this communication.
Sustainable Finance Disclosure Regulation ('SFDR')
The EU Sustainable Finance Disclosure Regulation ('SFDR') does
not have a direct impact in the UK due to Brexit, however, it
applies to third-country products marketed in the EU. As The Monks
Investment Trust PLC is marketed in the EU by the AIFM, BG & Co
Limited, via the National Private Placement Regime ('NPPR') the
following disclosures have been provided to comply with the
high-level requirements of SFDR.
The AIFM has adopted Baillie Gifford & Co's Governance and
Sustainable Principles and Guidelines as its policy on integration
of sustainability risks in investment decisions.
Baillie Gifford & Co's approach to investment is based on
identifying and holding high quality growth businesses that enjoy
sustainable competitive advantages in their marketplace. To do this
it looks beyond current financial performance, undertaking
proprietary research to build up an in-depth knowledge of an
individual company and a view on its long-term prospects. This
includes the consideration of sustainability factors
(environmental, social and/or governance matters) which it believes
will positively or negatively influence the financial returns of an
investment.
More detail on the Investment Manager's approach to
sustainability can be found in the Governance and Sustainability
Principles and Guidelines document, available publicly on the
Baillie Gifford website bailliegifford.com.
Taxonomy Regulation
The Taxonomy Regulation establishes an EU-wide framework or
criteria for environmentally sustainable economic activities in
respect of six environmental objectives. It builds on the
disclosure requirements under SFDR by introducing additional
disclosure obligations in respect of Alternative Investment Funds
that invest in an economic activity that contributes to an
environmental objective.
The Company does not commit to make sustainable investments as
defined under SFDR. As such, the underlying investments do not take
into account the EU criteria for environmentally sustainable
economic activities.
-ends-
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END
FR EADKNFLFDEFA
(END) Dow Jones Newswires
June 20, 2023 02:00 ET (06:00 GMT)
Grafico Azioni Monks Investment (LSE:MNKS)
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Grafico Azioni Monks Investment (LSE:MNKS)
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