For anyone reaching 40 with little or no savings, the idea of building a £500k pension pot might seem out of reach — but it’s not impossible.

With disciplined contributions, smart investing, and the power of compounding, it’s still achievable over a 25-year horizon.

A SIPP allows investors to choose their own funds, shares, bonds, or ETFs, giving greater control over long-term returns compared with traditional workplace pensions. The key is starting now and sticking to a well-diversified, growth-focused strategy.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Still time to compound

The magic of investing over a long period of time is compounding. This is when our investment start generating returns on previous returns. This is exponential growth.

So, how would one create a £500,000 SIPP from the age of 40? Well, here’s one theoretical calculation.

If a saver puts £640 per month into their pension, and then receives basic tax relief of 20%, the total monthly investment would be £800. Assuming 8% annualised growth, this portfolio would reach £500,000 in 20.5 years.

In turn, this could generate an income worth around £20,000 per year. It might not be enough to retire on, but it’ll be complemented by the State Pension when that age — whatever it may be in 20/30-odd years — kicks in.

The reality is that anyone looking to rely on the SIPP to take an early retirement may need a few more years of compounding.

That’s because after 25 years, this portfolio would be worth £760,000. That means it could deliver more than £30,000 annually.

The longer we let it grow, the more impressive the rate of growth.

Where to invest?

The tricky part is knowing where to invest. Many novice investors will start by taking positions in diversified investment opportunities. This includes vehicles like ETFs or trusts.

One great place to start is Baillie Gifford’s Scottish Mortgage Investment Trust or even The Monks Investment Trust (LSE:MNKS).

The Monks Investment Trust offers investors an enticing route to long-term capital growth through a globally diversified equity strategy.

Rather than chasing short-term gains, Monks focuses on businesses addressing major global challenges in innovative ways. This includes those capable of reducing costs or transforming the quality of services.

The trust’s portfolio includes household names such as Nvidia, Microsoft, and TSMC, alongside differentiated holdings like The Schiehallion Fund.

It has outperformed the FTSE All World Index over one year and 10 years, although it lags on a three- and five-year basis — it’s up 293% over 10 years.

However, investors should be aware that the trust is leveraged. This means it uses borrowing to finance some of its investments. Great when stocks are moving up, but less good when they’re in reverse.

Today, it’s trading at a 5.3% discount to net asset value (NAV) and with low ongoing charges of 0.43%, Monks represents an option worth considering.

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So how much does an investor need to earn £4,000 in monthly passive income? Well, it depends on the yield. At a 4% yield, an investor would need an ISA pot of around £1.2m to generate £4,000 a month. At 5%, the required amount falls to £960,000.

Clearly, that might sound like a tall task for many an investor. However, it’s perfectly achievable, even in an ISA, assuming the investor has some time on their side. Here are several theoretical ways the £960,000 figure could be reached.

These are randomly selected monthly contributions and investment growth rates. And of course, less money invested at a lower return would take much longer than my examples. But they collectively show how an investor could move from nothing to a near-£1m portfolio capable of generating £4,000 in tax-free monthly income.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

A dose of reality

This all sounds great, but it’s not going to be possible unless a would-be investor opens a Stocks and Shares ISA with a UK brokerage and starts contributing to their account. What’s more, investors can lose money, especially if they make poor investment decisions.

However, with an informed investment strategy, it’s possible to balance risk and reward in a way that steadily builds long-term wealth. By diversifying across different asset classes and maintaining a disciplined approach, investors can harness the benefits of tax-efficient accounts like Self-Invested Personal Pensions (SIPPs) and ISAs while minimising the chances of costly mistakes.

Where to invest for growth?

The beauty of investing within a Stocks and Shares ISA, especially through a major brokerage, is the range of investments opportunities. While I invest primarily in stocks in my ISA, my SIPP contains more investment trusts which provide a greater degree of diversification.

One investment trust I believe is worth considering is The Monks Investment Trust (LSE:MNKS). Managed by Baillie Gifford, Monks aims to deliver long-term capital growth by investing in a diversified global portfolio.

Unlike some trusts that concentrate on a narrow set of sectors or regions, Monks holds over a hundred companies across different industries and geographies, helping to spread risk while tapping into a broad range of growth opportunities.

Currently, the largest stocks in its portfolio include Meta, Microsoft and Nvidia — all big tech companies. But it’s not just tech. One of its larger holdings is Martin Marietta Materials — an American aggregate and heavy building materials company.

Concerns? Well the trust practices gearing — borrowing to invest — which can magnify losses when shares pull back. And while not a risk, it’s worth recognising that it’s underperformed its bigger brother trust — Scottish Mortgage — over the long run.

The post How much do you need in an ISA for £4,000 of monthly tax-free passive income? appeared first on The Motley Fool UK.

Here are three I think investors should consider as part of a high-performing Stocks and Shares ISA.

Tech star

The first thing to think about is harnessing the huge growth potential of the information technology sector. The digital economy continues to expand rapidly, and phenomena like artificial intelligence (AI), quantum computing, self-driving vehicles and automation are all tipped for incredible long-term growth.

The Allianz Technology Trust (LSE:ATT) is one investment vehicle that’s well placed to capture these opportunities. It holds a total of 49 tech shares, comprising market leaders and companies with great track records of innovation including Nvidia, Microsoft, Apple, Meta and Alphabet.

It’s important to remember that this sector’s highly cyclical, leaving the trust vulnerable in economic downturns. But I feel Allianz Technology’s long-term record speaks for itself. It’s delivered an average annual return of almost 8% since 2015.

Dividend collector

Holding a collection of dividend shares can provide a smoother ISA return over the economic cycle. Capital gains can be hard to come by during downturns, but this can be offset with shares that deliver a passive income.

The Chelverton UK Dividend Trust (LSE:SDV) can deliver on this strategy. Annual dividends have grown consistently for the last 14 years. And during the past five years, they’ve expanded at a healthy average rate of 6.3%.

City analysts expect this trend to continue. And so the dividend yield here for 2025 is an enormous 9.3%.

In total, the Chelverton trust holds shares in 66 companies, ranging from heavyweights with market caps above £1bn to tiddlers with a value below £100m. Therefore it provides exposure to mature companies with strong balance sheets, to smaller businesses with greater growth potential.

This weighting of small-caps admittedly also creates greater danger for investors. But as part of a diversified portfolio still think the trust’s worth considering.

The globetrotter

The final investment trust worth thinking about to round off our diversified ISA is the Monks Investment Trust (LSE:MNKS).

While the other two trusts provide exposure to just US and UK shares, this one’s net is spread far and wide, covering North America, Europe, Japan and global emerging markets. While the latter group may leave it more vulnerable to political shocks, its wide wingspan importantly also leaves it less dependent on a single region to drive performance.

This is another growth-based trust, but its 100+ holdings are widely spread across different sectors. These include tech stocks like Allianz Technology Trust owns, but also industrials, consumer goods, financial services and healthcare companies, among others.

It’s a strategy that’s paid off handsomely. Over the last decade, Monks has delivered an average annual return of roughly 13%.

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With time, consistency, and the power of compounding, even modest monthly contributions have the potential to grow into a substantial sum. This could possibly even making that child a mid-life millionaire.

In the example below, just £300 a month — totalling £3,600 a year — is invested from birth. Assuming a 10% annualised return, the ISA portfolio grows steadily year after year. By age 18, the ISA has already passed £180,000.

And this is where the real compounding starts. By 30, it’s nearing £680,000. Continue holding it — and making contributions — and by age 35 the pot has passed £1.1m. By age 40, it exceeds £1.8m.

The power of compounding

This remarkable growth isn’t down to luck or market timing, but rather the mathematical power of compounding returns over time. The earlier the investing journey starts, the more time capital has to snowball.

This snowballing can happen even from a relatively small base. And because a Stocks and Shares ISA allows tax-free growth and withdrawals, it offers a uniquely efficient vehicle for long-term wealth-building.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

It’s important to remember however, that the stock market carries risk. Returns aren’t guaranteed, and investments can fall as well as rise. The 10% annualised return used here is for illustrative purposes only, based on long-term historical averages like the performance of the S&P 500.

Still, the underlying message is really compelling. Early action coupled with regular contributions and patience can build a seven-figure portfolio for a child. Whether it’s for their first home, education or retirement, giving children a financial head start could be one of the most valuable legacies a parent can offer.

Where to invest?

There are several intelligent ways to start. And unless you’re a seasoned investor, the common theme is diversification. An investor may plan to focus on individual stocks and buy, say, two stocks a month, balancing diversification with highconviction investment opportunities.

Or, they may wish to start by investing in a trust or fund. I’d add that I’ve employed both strategies for my daughter’s ISA and Self-Invested Personal Pension (SIPP). The ISA is composed of 20-30 stocks with strong quantitive scores and the SIPP is more trust- and fund- focused.

With regard to investment trusts, one present in her SIPP and my pension is The Monks Investment Trust (LSE:MNKS). While it’s lagged its sister portfolio — Scottish Mortgage Investment Trust — over the past decade, it’s actually up 21% over the past year.

Monks’ diversified yet growth-focused approach aims to avoid overexposure to any single theme, while still capturing the appreciation of global innovators. Alongside US tech, it holds stakes in Taiwan Semiconductor, Prosus, and even Ryanair, reflecting a broad geographic and sector mix.

Its inclusion of The Schiehallion Fund — an illiquid vehicle focused on private growth companies — adds another unique angle, though it introduces valuation risk in less transparent markets.

While Monks isn’t as volatile as Scottish Mortgage, it still carries the usual risks associated with equity investing. It also practices gearing — borrowing to invest — which can amplify losses when the market reverses.

For long-term investors seeking global exposure, Monks deserves consideration.

The post Here’s how to aim to make your kids millionaires with a Stocks & Shares ISA appeared first on The Motley Fool UK.

But in the 12 months to 30 June, Monks outperformed the FTSE World Index, delivering a 9.7% share price return versus 7.8% for the benchmark. And year to date, the investment trust is also ahead of the market.

Three growth buckets

The aim of Monks is to achieve returns by investing globally in growth stocks from any sector. It currently holds around 100 shares, with the portfolio structured into three key buckets: rapid growth, growth stalwarts, and cyclical growth.

Rapid growth is pretty self-explanatory. These are businesses capitalising upon large growth opportunities, such as Nvidia in AI, Brazilian digital bank Nu Holdings, South Korean e-commerce firm Coupang, and e-commerce enabler Shopify.

Growth stalwarts are durable franchises that tend to deliver the goods in most macroeconomic environments. This part encompasses well-known brands like Microsoft, Mastercard, Amazon, and Meta Platforms.

The final bucket contains firms with strong structural growth prospects, but where there might be a bit of cyclicality here and there. Top holdings here include Ryanair, building materials group CRH, and Chinese battery giant CATL.

Portfolio adaptation

In a recent investor update, Monks wrote that “interest rates are no longer zero. Tariffs are back. Nationalism and populism are on the rise. President Trump’s sweeping import tariffs…Economic uncertainty has surged, and the range of plausible macroeconomic scenarios has widened. The old order is not coming back.”

In response to this new macroeconomic reality, the trust has been adapting the portfolio. It has sold Adidas, which relies on a globalised supply chain and frictionless trade.

Monks has also been crystallising gains from strong winners and recycling them into new positions. For example, it pruned back Spotify and MercadoLibre and used the proceeds to initiate a new holding in Uber.

The market appears to underappreciate Uber’s longevity and robustness, while we believe the company has the potential to transform urban mobility and become a major player in the future of autonomous transport.

Monks.

Buybacks and discounts

In the year to 30 April, the trust bought back £321m worth of its own shares (12.4% of issued share capital). However, a 10% discount to net asset value (NAV) remains. 

While I’m in favour of the board buying back shares to try and narrow the discount, there’s no guarantee of success (the gap could even widen). 

Meanwhile, net gearing stood at 8.9% in April. That’s pretty modest and is below the board’s borrowing target. But gearing can still magnify losses as well as juice gains. In other words, gearing adds risk as well as reward, especially in volatile markets.

Final thoughts

There’s a solid range of diverse growth opportunities across the portfolio, spanning different sectors and geographies. And around 25% of Monks is invested in businesses that power, build or benefit from AI.

These range from Disco Corporation (dicing, grinding and polishing equipment for semiconductor wafers) to software giant Salesforce (which is releasing AI agents). 

My portfolio is already pretty full with investments trusts at the moment. But weighing things up, I reckon investors should consider including Monks shares in a diversified portfolio.

The post This FTSE 250 trust is easily beating the global index in 2025. Time to buy? appeared first on The Motley Fool UK.

But what if we could start earlier? We can — it’s just not always up to us. In the UK, we can open Junior ISAs, which eventually become a Stocks and Shares ISA when the owner reaches adulthood.

This means that we can start contributing to their wealth from birth. This also means many more years of compounding. It means the money we put in is compounding as she goes through nursery and through school. And hopefully, when she starts working, she’ll start to contribute to it herself.

Running the maths

By contributing £700 each month into my daughter’s Junior ISA, and assuming a 10% annualised return compounded yearly, my regular investing over 30 years has the potential to grow into a substantial sum, thanks to the power of compounding.

Over the 30-year period, the total contribution would be £252,000 (£8,400 annually). The returns, however, build exponentially.

After just one year, the balance reaches £8,796. After 10 years, it’s around £143,391. By year 30, the value reaches approximately £1,582,342, with £1,330,342 of that total being pure investment growth.

Assuming a 5% yield, this £1.6m portfolio could deliver more than £75,000 annually as a second income.

This demonstrates how time in the market compounds returns significantly. The majority of the final total does not come from my contributions, but from the returns generated on earlier returns. Market performance can vary, of course, but this highlights what consistent long-term investing can achieve.

And of course, remember that this is investing. And investments can fall in value. However, risk-aware investors can achieve life-changing returns over the long run.

Where to invest?

While I generally prefer Scottish Mortgage Investment Trust, my daughter also holds shares in The Monks Investment Trust (LSE:MNKS). Both are run by Baillie Gifford.

The Monks portfolio spans over 100 global stocks, with leading positions in Microsoft (4.5%), Meta Platforms, Amazon, Nvidia, Prosus, and TSMC among its top holdings.

More broadly, the investment trust seeks long-term growth by holding a diversified global portfolio divided into three categories. These are: disruptors (companies driving industry change through innovation), compounders (steady-growth businesses that build wealth gradually), and capital allocators (economically sensitive firms able to deploy capital effectively). 

This balanced approach enables the trust to benefit from both fast structural changes and stable, enduring business models.

Performance has been strong over the past year — up 10.5%. However, it has occasionally lagged its benchmark and global peers during sharp market rotations or concentrated market rallies.

Other risks include currency fluctuations, exposure to emerging markets and private companies, and the use of gearing, all of which can heighten volatility.

However, I like the diversified nature of the portfolio and I believe it deserves greater consideration.

The post My daughter could earn a £75,000 second income because we started an ISA at birth appeared first on The Motley Fool UK.

Starting investing can feel overwhelming, but breaking the process down into simple, manageable steps makes it much more approachable.

The first step involves selecting a brokerage platform that offers a Stocks and Shares ISA, such as Hargreaves Lansdown, or AJ Bell. Opening an ISA’s crucial because it allows investments to grow free from capital gains and dividend taxes, maximising the potential returns over time.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

The next step

Once the ISA’s set up, establishing a regular investment plan is the next logical move. This typically involves arranging a monthly direct debit to invest a fixed amount.

At first, this may involve investing straight into a fund or trust to gain instant diversification. This can be done through the brokerage. Stock picking can come later.

A popular choice for many investors is an S&P 500 ETF. For example, the Vanguard S&P 500 ETF has delivered an average annual return of around 12.5% over the past decade.

By investing a consistent sum each month, the strategy known as pound-cost averaging comes into play. This approach means more units are purchased when prices are low and fewer when prices are high, smoothing out the impact of market fluctuations and reducing the risks associated with trying to time the market.

Maths and compounding

The real power behind this method lies in compounding. Returns generated by the investments — whether through dividends, interest, or capital gains — are reinvested, creating a snowball effect. This is where earnings generate further earnings. Over time, this compounding can significantly amplify the value of the portfolio.

To illustrate, a monthly investment of £500 into an S&P 500 ETF, assuming a 12.5% annual return, could grow to approximately £480,000 in just under 20 years.

However, 12.5% as an ambitious goal. Investing in a diversified portfolio of mature UK dividend-paying stocks with an average annual growth rate of 7% would reach the same target in around 27 years.

And a £480,000 portfolio could generate £2,000 a month, assuming a 5% yield.

A first investment

If an investor is starting from scratch, I think they should first seek the diversification I mentioned above. One investment could be The Monks Investment Trust (LSE:MNKS).

This investment trust is designed as a core global growth holding, offering exposure to a diversified portfolio of companies across developed and emerging markets. Managed by Baillie Gifford, Monks prioritises long-term capital growth over income, with the current yield standing at just 0.17%.

The portfolio’s structured into rapid growth, growth stalwarts, and cyclical growth buckets, and traditionally has a bias towards small- and mid-cap companies that are often overlooked by the broader market. This differentiated approach can provide access to under-appreciated growth opportunities.

However, this strategy comes with risks. Monks has lagged its benchmark in recent years, particularly when market returns have been concentrated in large-cap technology stocks. Moreover, the trust’s focus on growth means it can underperform when growth stocks fall out of favour.

However, I’m backing it to outperform over the long run. And this was why I made it one of my first investments in my daughter’s Self-Invested Personal Pension (SIPP). It definitely deserves broader consideration.

The post How an investor could target £2,000 of monthly passive income by starting to invest in 2025 appeared first on The Motley Fool UK.

Here’s an example

Suppose an investor contributes £750 per month into a Stocks and Shares ISA, targeting an annualised return of 10%. Over 30 years, these regular contributions, combined with the power of compounding, would grow the ISA pot to approximately £1.7m. This projection assumes all returns are reinvested.

Once the investor decides to retire or change focus from growth to income, they can shift the portfolio towards income. This may mean investing in dividend shares or buying debt (bonds). On a £1.7m ISA, a 5% yield would generate a tax-free income of around £85,000 per year. Because this income is produced within a Stocks and Shares ISA, it’s entirely shielded from any form of UK tax.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

To put this in perspective, consider a UK salary of £40,000 per year. After income tax and National Insurance, the take-home pay is roughly £32,000. That’s assuming current rates and no additional deductions. If this salary grows by 2% per year — a reasonable long-term estimate for wage inflation — it would reach about £72,600 after 30 years. However, after tax, the net income would still be below the £85,000 tax-free income generated from the ISA.

When the ISA income overtakes the salary

Based on these assumptions, the ISA-generated passive income would surpass the inflation-adjusted, post-tax salary after 30 years. In fact, the ISA income overtakes the net salary even before the 30-year mark. For example, after 25 years, the ISA pot would be just under £1m. In turn, this would produce a tax-free income of nearly £50,000 — already above the inflation-adjusted, post-tax salary at that point.

A stock for the job

Of course, investors can lose money, and there’s no guarantee of hitting 10% annual growth. However, with a sensible strategy, it can be achieved.

The Monks Investment Trust (LSE:MNKS) offers investors broad diversification across global stocks, making it worth consideration for those aiming to build a resilient, long-term ISA portfolio.

With over 100 holdings spanning sectors such as technology, healthcare, industrials, and financials, Monks provides exposure to established growth giants like Meta, Microsoft, and Amazon, as well as emerging markets leaders and innovative companies worldwide. 

Its portfolio is geographically diverse, with significant allocations to the US, Europe, Asia, and emerging markets, reducing reliance on any single region. 

The trust’s active management focuses on companies with above-average earnings growth, grouped into rapid growth, stalwarts, and cyclical growth categories, which helps balance risk and return.

However, investors should be aware that the trust uses gearing — borrowing to invest. This can amplify losses and as well as gains. It also may perform poorly if big US tech companies go into decline.

Nonetheless, it’s an investment trust I have in my pension and my daughter’s pension. It may not be as exciting as some of its peers, but it appears to offer a healthy mix of diversification and growth.

The post Here’s how investors can use an ISA to replace their salary with passive income appeared first on The Motley Fool UK.

Market returns

This is not just theoretical. Historical data from the S&P 500, the world’s most-watched stock market index, shows why a 10% annual return is a reasonable long-term expectation for equity investors.

The S&P 500 has delivered an average annual return of about 10% since 1957, including dividends. This figure is not a guarantee for every year — returns can swing wildly from one year to the next — but over decades, the average holds remarkably steady.

For example, over the last 30 years, the S&P 500’s average annualised return has been around 9% to 10%, even after accounting for periods of dramatic losses like the dot-com bust and the global financial crisis.

Over the last 10 years, the average has been even higher, at approximately 11.3% annually. These numbers illustrate that, despite short-term volatility, patient investors who stay the course are often rewarded.

Compounding for victory

The real magic happens when investing starts early. With £500 invested each month at a 10% annual return, the compounding effect means that after 10 years, the balance could exceed £100,000, but after 30 years, that sum grows to over £1.1m.

The vast majority of this final amount comes not from the contributions, but from the interest earned on previous gains. This is why time in the market is so valuable: the longer the money has to grow, the more powerful compounding becomes.

Planning for the future by investing early and consistently is the surest way to harness the full potential of the stock market’s long-term returns. Of course, the actual investing can be the hard part. Novice investors often make the wrong decisions and can lose money.

Where to invest?

The Monks Investment Trust (LSE:MNKS) is a long-established global investment trust managed by Baillie Gifford, with a focus on achieving long-term capital growth rather than income. Investors may be more familiar with its larger sibling, Scottish Mortgage Investment Trust.

Its approach is patient and actively managed, seeking out a diversified range of growth stocks from around the world. The portfolio is spread across regions including North America, Europe, the UK, Japan, developed Asia, and emerging markets, with significant allocations to sectors such as technology, industrials, consumer discretionary, and financials.

This broad diversification helps to reduce risk and smooth out returns over time. As such, it may be a good place to start for novice investors looking to achieve immediate diversification.

Performance data shows that Monks has delivered strong long-term results, with a share price total return of approximately 198% over the past 10 years and a net asset value (NAV) total return of 192% over the same period. 

Risks? Well, gearing — borrowing to invest — is always a concern as this can magnify any losses. However, I certainly believe it’s an investment worth considering. It’s also present in my daughter’s pension and mine.

The post How to invest £500 a month in a Stocks & Shares ISA and aim for £1m appeared first on The Motley Fool UK.

True, almost maxing out my ISA contributions and achieving an annualised rate of return of 10% would take me to £2m. And while that sounds like a lot, we’ve got to take account of inflation and the fact that I may live several more decades after that.

The solution, which is no longer available to me, is to have invested more consistently from the moment I took my first salary. While I contributed to my ISA here and there, regular contributions would have made a huge difference. One of my excuses for not investing monthly was… “I’ll earn more when I’m older”.

And what I really wish I understood properly was the value of compounding. For example, if I had just 10% of my current portfolio 10 years ago, and then committed to maxing out my ISA while achieving a 10% annualised return over 28 years, I’d have £3.5m by the time I reach 50.

And yes, I’m going on about compounding, but it’s why more parents, if they can, should consider utilising the Junior ISA. With 50 years of compounding, early retirement’s very possible.

A core investment for building a portfolio

Most people wish they could invest in the Medallion Fund by Renaissance Technologies, famous for its extraordinary annualised returns of over 30%. And that’s after its extraordinarily high fees.

Sadly, that’s not possible for the average investor — it’s closed to the public. So it’s necessary to look at listed alternatives. Monks Investment Trust (LSE:MNKS) is one such opportunity that investors should consider for the long run.

Managed by Baillie Gifford, the investment trust offers a globally diversified portfolio of growth companies. It balances rapid growers like Nvidia with more defensive stalwarts like Mastercard and cyclical names such as Ryanair.

Over the past decade, Monks has delivered a share price total return of nearly 184%, with NAV up 188%. That closely tracks global equity indexes. While recent years have seen more muted returns — partly due to a market focus on a narrow set of mega-cap tech stocks — the trust’s current 10% discount to NAV may offer a rare entry point for long-term investors.

It’s also much more diversified that its better known sibling, the Scottish Mortgage Investment Trust. Monks’ approach is patient and diversified, with no single theme or sector dominating. This reduces the risk of being caught out by market fads or bubbles.

However, there are risks, including modest gearing around 5% and the chance that the discount persists if sentiment remains cautious. However, for investors seeking long-term capital growth through global diversification, Monks Investment Trust could be a viable option. It’s a core part of both my own and my daughter’s pensions.

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