Monks Investment Trust: Building Resilience
- Dylan Patel
- Jul 8
- 4 min read
The WHITEFRIARS team recently met the Baillie Gifford team that manages the Monks Investment Trust, founded on the eve of the Wall Street Crash in 1929 at Austin Friars in the City of London. Monks, the third in a series of investment trusts launched in the late 1920s by the bank J.C. im Thurn & Sons, respectively Friars, Abbots and Monks. Following the Wall Street Crash, the bank collapsed, and the management of Monks was bequeathed to Baillie Gifford in 1931. In 1965, under the Finance Act, new tax regulations were introduced, burdening investment trusts with extra administration. Consequently, Baillie Gifford decided to merge Friars, Abbots and Monks investment trusts into what Monks is today[1]. Monks is a closed–ended investment trust with total assets exceeding £2.5bn (as of 31st March 2026).
People
Veteran manager and partner at Baillie Gifford, Spencer Adair, retired at the end of March this year, after 3 decades at the firm – he was the lead manager of the trust, starting the role in 2021, taking over from Charles Plowden. During his time managing the trust, it returned 6.3%[2]. His replacement, Michael Taylor, previously worked at Baillie Gifford between 2009 and 2014, before leaving to join Marathon Investment Management. In 2022, Michael re-joined the firm and was promoted to partner in 2025. The other two managers, Helen Xiong and Malcom MacColl, have been long-time employees of Baillie Gifford and have been working on managing the Global Alpha investment arm, under which the Monks Investment Trust sits, for over 15 years. The trust has commented that under the change, there will be no change in the investment objective or strategy.
Philosophy
The trust has positioned itself with a long–term growth–oriented strategy, on average holding companies for around 5 years, which takes priority over dividend income. This is broken up into three growth profiles, which the trust invests in: growth stalwarts (e.g. Mastercard), rapid growth (e.g. Mercado Libre) and cyclical growth (e.g. CRH). This means that the portfolio is globally spread out and highly diverse, which reduces volatility. Furthermore, the lead manager commented on the risk of the portfolio becoming unbalanced; therefore, the team will not allow any growth profile of the fund to exceed 45% of the allocation. The trust aims to capture the upside growth of market volatility, without overexposing itself to excess levels of risk in the market, focusing on resilience.
Process
The trust's active investment process (80% active share) is supported by Baillie Gifford's global network of research analysts, researching companies in different regions, looking for opportunities to invest in companies delivering suitable growth for one of the trust's growth profiles. Since the trust is long-term in its scope, analysts favour bottom–up selection, overlooking macro trends and shifts in favour of a company’s business fundamentals and financials.
Positioning
By sector, the trust is weighted heavily in technology (35.5%), industrials (17.3%), financials (14.4%) and consumer discretionary (12.9%), with smaller weightings under 10% in healthcare, energy and telecom. Geographically, the trust is largely invested in North America at 57.4%, the UK at 6.8%, Europe at 9.9%, and Emerging Markets at 19.5%. The top 10 largest holdings of the trust make up 35.6% of total assets, and the top 5 holdings all exceed 3% of total assets; some of the names include TSMC, NVIDIA, Alphabet and Amazon. Monks also holds 5.8% of the Schiehallion Fund, which is a fund also managed by Baillie Gifford.
Performance
Although Monks has delivered strong returns in the last year leading up to the 31st of March, of 20.9% share price increase and 17.5% NAV increase, over the longer term, the trust has been lagging its benchmark, the FTSE World index. Over 3 years, the trust returned 45.5%, underperforming the benchmark by 7.8%. Recent outperformance has been driven by increased investment in AI and semiconductor markets. Lead managers at Monks believe in and support the AI craze, coming with it increased current and predicted capital expenditure – managers question where the value will accrue in AI spend. Still, throughout growth, Monks aim to be more selective in semiconductor investment – prioritising high-bandwidth memory over traditional chip manufacturers. Furthermore, increased AI investment has led to new bottlenecks where there weren’t any before, for example, in computing power and resources. This drives growth in companies that have been stagnant in the past, for example, copper and silica miners. Since March of 2022, the share price to NAV has been trading at a discount – significant share buybacks have been initiated to try to close the gap between NAV and the share price.
Outlook
The new management team is aiming to improve resilience and capitalise on the volatility of the markets, which are showing indications of calming down. Monks have acknowledged shifting conditions in the markets where they heavily invest and have strengthened resilience, invested in areas where they see opportunities arising, and have offloaded in areas where AI has reshaped business models, removing value. The portfolio is globally diversified and heavily weighted in technology stocks, so only time will tell if Monk's heavy investment into AI and its beneficiaries will pay off for its investors.
