Monks Investment Trust (LSE: MNKS) from the FTSE 250 doesn’t get the same attention as fellow Baillie Gifford funds like Scottish Mortgage Investment Trust. But the 10-year return of 175% is nevertheless solid.
I was interested to see that the trust’s managers have been doing some portfolio shopping recently. Here’s what they’ve been buying, including a pair of top additions from the S&P 500.
What is Monks?
Monks aims for long-term capital growth through a diverse range of growth stocks.
Looking at the top 10 holdings, I see Service Corporation International (funeral services) and Elevance Health (health insurance and services), as well as the usual tech suspects (Microsoft, Meta, Nvidia, and Amazon).
There’s Ryanair and building materials firm CRH in there too. Such non-tech names certainly differentiate Monks from Scottish Mortgage.
Portfolio rejig
In its latest shareholder newsletter, the trust said it “spent the quarter bringing in new ideas that widen our range of growth drivers and position Monks well for a changing world.”
The managers reckon two of the most important considerations for investors in the years ahead are the changing geopolitical landscape (tariffs and global trade) and the emergence of artificial intelligence (AI). I agree with this and have been spending a lot of time thinking about these themes in relation to my own portfolio.
Perhaps the managers have access to my brain because they’ve added Uber and Nu Holdings to the portfolio. Earlier this week I wrote that Uber was my favourite S&P 500 growth stock, while Nu (Latin America’s largest digital bank) is one I bought last year.
Monks said Uber “has proven its adaptability by successfully navigating regulatory frameworks for ride-hailing around the world.” Interestingly, this is the first time any Baillie Gifford fund has invested in Uber (it didn’t like the culture under the previous management team).
Elsewhere, it bought Sea, the owner of e-commerce platform Shopee, and UK housebuilder Bellway. It sold Adidas, Estée Lauder and Pernod Ricard a while back because they rely on “frictionless trade to grow“. That’s not likely with President Trump in the White House.
AI agents
Another interesting S&P 500 stock the trust bought — and which I’ve also been considering — is Salesforce. Its Agentforce digital labour platform allows organisations to build, customise, and deploy AI agents capable of executing tasks autonomously.
It has already closed thousands of paid deals for Agentforce, allowing “any company to build a limitless workforce“. The vision is to automate and enhance various business across any system or workflow.
Admittedly, Salesforce faces fierce competition in this space from Microsoft and others. So it’s not nailed on to dominate. But CEO Marc Benioff estimates the digital labour market could be worth up to $12trn!
My decision
Back to Monks, it’s trading at a 9% discount to net asset value. That might reflect concerns that US stocks are highly valued and a recession looks likely. So there are risks associated with the shares, in addition to risks associated with the individual stocks it holds.
I won’t invest because I already have positions in Uber, Nu, Nvidia, TSMC, as well as Big Tech through a Nasdaq fund. And I might buy Salesforce stock. I don’t want to duplicate my holdings.
But for investors seeking a diversified growth trust at discount, I think Monks is worth considering.
