11th Jun 2014 08:01
LONDON (Alliance News) - The Monks Investment Trust PLC Wednesday said its net asset value total return and share price total return rose in its last financial year, although they underperformed the comparative index after the trust's performance deteriorated in the last two months of the year.
Its net asset value total return, including capital and income, was 5.2% in the year to end-April, while the share price total return was 5.4%. However, its comparative index, the FTSE World Index, returned 6.8% over the same 12 months.
"During the second half of the company's year the net asset value per share reached a record month-end high at the end of February 2014 but performance deteriorated from this point as growth stocks suffered a setback. Performance was well ahead of the comparative index until the last two months of the company's year," the trust said in a statement.
The Monks Investment Trust is managed by Baillie Gifford & Co. It had moved to strengthen its performance after it underpeformed its benchmark index in its previous financial year.
"Last year the board and the managers undertook a thorough review of the causes of performance in recent years and actions were taken to address these, including the strengthening of the team managing the portfolio with the appointment of Tom Walsh as Deputy Manager alongside Gerald Smith," it said.
"The success of these steps cannot be evaluated over a period as short as a year, given the company's objective of capital appreciation over the long term, but there have been encouraging signs of an improvement in trend, notwithstanding the influence of some extreme share price moves in the last two months of the period," it added.
The trust said it will pay a final dividend of 3.45 pence, making the total dividend for the year 3.95p, unchanged from the previous year.
Over the course of the year, the trust made net disinvestments of GBP91.1 million, comprising GBP85.4 million in net sales of equities and GBP5.7 million in net sales of bonds. There were net purchases of equities in Europe and Australasia and net sales in all other regions.
The proceeds of the sales were mainly used to repay debt and repurchase shares for cancellation. A GBP40 million three year loan was repaid on maturity at the end of February.
Th trust's portfolio is currently diversified across a range of different types of shares, but is biased away from the very largest companies. It expects this to continue for the time being.
"This is a time of rapid change, when traditional business models face increased risk of disruption from new entrants, often making better use of the possibilities created by the internet, and our managers believe that there are better growth prospects among the disrupters than are generally to be found among the incumbents. In the short term, the share prices of the newer entrants tend to be more volatile, making returns on an annual basis less predictable, but the long run return should be better," it said.
The biggest positive contributors in the last financial year were Sky Deutschland, Facebook, Zillow, Xero Ltd and Alnylam Pharmaceuticals, while the worst performers were Nanoco Group, Kunlun Energy, Imagination Technologies, Ocwen Financial and Westport Innovations.
The Monks Investment Trust shares were up 0.6% at 383.302 pence early Wednesday, one of the biggest gains on the FTSE 250.
By Steve McGrath; [email protected]; @SteveMcGrath1
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