Monks tumbles 'jarring' 19% while wider market rises

Down 18.9%

clock • 2 min read
Manager Spencer Adair

Manager Spencer Adair

Monks investment trust delivered negative returns to investors for the year ending 30 April 2022, with returns down 18.9%, compared to gains of 6.1% from its FTSE World index, the company revealed in its annual results.

Its share price return for the period was down 24.6%, which the company said was "disappointing", attributing it to a backdrop of economic uncertainty over the past 12 months.

Turnover for the year was 11%, while invested borrowing stood at 7.3% at the financial year end.

It had a single final recommended dividend of £2.35, compared to £2 last year, while its share price ended the year at a 4.4% discount to its net asset value (NAV), as 8,808,550 shares were bought back at a discount, equating to 3.7% of the company's share capital, at a total cost of £98m.

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A statement read: "In the main, the companies in the portfolio continue to perform well operationally and are financially robust. The managers believe the portfolio holdings are well placed to navigate a period of rising inflation and remain resolutely reward seeking in their approach."

Manager Spencer Adair acknowledged the sudden drop had been "jarring" for investors, adding the current global uncertainty meant he would offer no predictions but reasserted the trust looked for long-term winners.

Ongoing charges were down for the year, from 0.43%, to 0.4%.

Since 2015, the NAV total return has been 147.8%, and the share price total return 163.6%, while its comparative index was at 128.9%.

Chair Karl Sternberg said: "The end of Covid restrictions in the Western world has delivered a new set of challenges to investors. Our economic problems are manifesting themselves in a burst of inflation, leaving central bankers with no good policy choices.

"We cannot know whether inflation will be cured by an economic slowdown, or whether a slowdown will turn into a nasty recession. Stock markets have reflected this greater uncertainty by marking down the prices of all financial assets, particularly hitting the growth companies in which Monks invests."