Annual Financial Report

RNS Number : 4018Q

Monks Investment Trust PLC

06 June 2018

 

RNS Announcement: Preliminary Results

The Monks Investment Trust PLC

Legal Entity Identifier: 213800MRI1JTUKG5AF64

Unaudited Preliminary Results for the year to 30 April 2018

Over the year to 30 April 2018, the Company's net asset value (NAV) total return* was 15.8% compared to a total return of 7.5% for the FTSE World Index (in sterling terms). The share price total return for the same period was 20.4%.

-  Amazon, NVIDIA and Alibaba were the most notable positive contributors to absolute returns in the period during which 14 of our holdings appreciated by more than 50% in sterling terms.

-  Portfolio turnover for the 12 months was 19.8% and the Company's invested gearing stood at 4.6% at the financial year end.

-  A single final dividend of 1.40p is being recommended, compared to 1.25p last year. This is the minimum required to maintain the Company's investment trust status, reflecting its priority which is capital growth.

-  Over the period, 3,180,000 shares were issued at a premium to NAV, being 1.5% of the Company's share capital, raising £25m. The share price ended the year at a 3.4% premium to NAV*.

-  Ongoing charges for the year to 30 April 2018 were 0.52%, down from 0.59% in the prior year.

-  An additional third tier to the management fee of 0.30% on assets above £1.75bn took effect 1 May 2018.

-  The managers continue to see a broad spread of new ideas coming forward, from a range of different industries and geographies, and remain optimistic for future portfolio returns.

-  Since the change in approach in March 2015 the NAV total return at fair value has been 57.9% and the share price total return 84.4% against the comparative index at 40.3%**.

* With borrowings deducted at fair value

** Total returns from 31 March 2015 to 30 April 2018.

Past performance is not a guide to future performance. Total return information is sourced from Baillie Gifford /Morningstar. See disclaimer at the end of this announcement. For a definition of terms see Glossary of Terms at the end of this announcement.

 

The Monks Investment Trust PLC invests globally in order to achieve capital growth. This takes priority over income and dividends. Monks is managed by Baillie Gifford, an independent fund management group, which has around £193 billion under management and advice as at 4 June 2018.

Monks is a listed UK company. The value of its shares and any income from them can fall as well as rise and investors may not get back the amount invested. The Company is listed on the London Stock Exchange and is not authorised or regulated by the Financial Conduct Authority. You can find up to date performance information about Monks at www.monksinvestmenttrust.co.uk^‡. Past performance is not a guide to future performance. See disclaimer at the end of this announcement.

‡    Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

5 June 2018

For further information please contact:

Anzelm Cydzik, Baillie Gifford & Co

Tel: [phone]

Roland Cross, Director, Four Broadgate

Tel: [phone] or 07831 401309
 

The following is the unaudited preliminary statement of annual results for the year to 30 April 2018 which was approved by the Board on 5 June 2018.

Chairman's Statement

For the second year in succession Monks has produced strong returns which significantly exceeded the comparative index.  Our managers comment in detail later in this report but the key contributor has been the strong revenue and profit growth of the underlying portfolio.  This is the direct consequence of the change made three years ago towards an explicit growth approach and our managers have constructed a balanced and differentiated portfolio of above average growth companies, many of which face substantial open-ended opportunities. 

Performance since this change has been good and, when combined with an increase in the Company's marketing budget and the Managers' effective marketing efforts to attract new buyers and long-term holders, has increased demand for Monks shares.   This has had the result that the shares have recently been trading at a premium to Net Asset Value ('NAV') which has enabled Monks to issue new shares for the first time in more than 55 years.  The increase in the size of the Company has encouraged the managers to reduce further the tiered management fee, to the benefit of all shareholders and to increase their marketing efforts. 

The Board is encouraged by the results of the new approach over the last three years and believes that Monks is today well placed to become a preferred long-term savings vehicle for individuals and wealth managers.

Performance

Although five years is really the minimum period over which to measure the success or failure of an investment approach, the Board is encouraged nonetheless to note that in the year to 30 April 2018 the NAV total return, with borrowings calculated at fair value, was 15.8% and the share price total return was 20.4%. Over the same period the total return for the FTSE World Index was 7.5%, in sterling terms.  Since the change in approach in March 2015 the NAV total return at fair value has been 57.9% and the share price total return 84.4% against the comparative index at 40.3%*.

Borrowings and Gearing

As at the financial year end, the invested gearing was 4.6% compared to 6.6% at the start of the period.  The Board and managers believe the long-term neutral position is likely to be close to invested gearing of 10% and flexible short-term bank facilities are in place should appealing opportunities arise.

Share Issuance

Over the course of the year, Monks shares traded close to NAV.  This enabled the Company to issue 3,180,000 new shares at a premium to NAV, being 1.5% of Monks share capital and raising £25m of new funds for investment. Share issuance is only undertaken at a premium to the NAV so as to benefit existing investors.

Management Fee

Ongoing charges for the year to 30 April 2018 were 0.52%, down from 0.59% in the prior year. Having agreed a new two tiered management fee in 2017, I am pleased to note that the continued growth of the Company has meant that the Managers have agreed an additional tier to the management fee, coming down to 0.30% on assets above £1.75bn, with effect from 1 May 2018. Last year's change in fee structure resulted in a saving of £873,000 compared to what would have been paid under the former arrangement.  Lower fees are an important contributor to shareholder returns and we welcome this further reduction.  Although there is little immediate cost saving from the new third tier, it will ensure that shareholders continue to benefit from economies of scale and any future growth of Monks.

Earnings and Dividend

Monks invests with the aim of maximising capital growth rather than income and all costs are charged to the Revenue Account.  Earnings per share were 2.61p compared to 2.36p in 2017 and the Board is recommending that a single final dividend of 1.40p should be paid, compared to 1.25p last year. This is the minimum required to maintain investment trust status. No interim dividend was paid during the year.

Outlook

The chief concerns facing markets currently are elevated valuations, the uncertain impact of rising interest rates and an apparent return of volatility.   On the other hand, there appears to be an abundance of growth opportunities from across a range of economies and new and fast changing technologies.  It is our managers' belief that investors generally dwell too much on the macro environment and not enough on individual company prospects, which typically drive most long term value creation.  They report a wide range of new investment opportunities, well diversified by geography and by industry, trading on still reasonable levels of valuation, which gives us confidence in the future returns from the portfolio over the longer term. 

Annual General Meeting

I would encourage shareholders to attend the Annual General Meeting, which will be held on 4 September 2018 at 11.00am at the Institute of Directors. Our managers will give a presentation and there will be an opportunity to ask questions and to meet them and the Directors informally.

James Ferguson

Chairman

5 June 2018

*   Total returns from 31 March 2015 to 30 April 2018.

Past performance is not a guide to future performance.

Total return information is sourced from Baillie Gifford /Morningstar. See disclaimer at the end of this announcement.

For a definition of terms used see Glossary of Terms at the end of this announcement.

The Managers' Core Investment Beliefs

We believe the following features of Monks provide a sustainable basis for adding value for shareholders.

Active Management

- We invest in attractive companies using a 'bottom-up' investment process. Macroeconomic forecasts are of relatively little interest to us.

- High active share* provides the potential for adding value.

- We ignore the structure of the index - for example the location of a company's HQ and therefore its domicile are less relevant to us than where it generates sales and profits.

- Large swathes of the market are unattractive and of no interest to us.

- As index agnostic global investors we can go anywhere and only invest in the best ideas.

- As the portfolio is very different from the index, we expect portfolio returns to diverge - sometimes substantially and often for prolonged periods.

Committed Growth Investors

- In the long run, share prices follow fundamentals; growth drives returns.

- We aim to produce a portfolio of stocks with above average growth - this in turn underpins the ability of Monks to add value.

- We have a differentiated approach to growth, focusing on the type of growth that we expect a company to deliver. All equity holdings fall into one of four growth categories - as set out in the Equity Portfolio by Growth Category table below.

- The use of these four growth categories ensures a diversity of growth drivers within a disciplined framework.

Long-Term Perspective

- Long-term holdings mean that company fundamentals are given time to drive returns.

- We prefer companies that are managed with a long-term mindset, rather than those that prioritise the management of market expectations.

- We believe our approach helps us focus on what is important during the inevitable periods of underperformance.

- Short-term portfolio results are random.

- As longer-term shareholders we are able to have greater influence on environmental, social and governance matters.

Dedicated Team with Clear Decision-making Process

- Senior and experienced team drawing on the full resources of Baillie Gifford.

- Alignment of interests - the investment team responsible for Monks all own shares in the Company.

Portfolio Construction

- Equities are held in three broad holding sizes - as set out in the Equity Portfolio by Growth Category table below.

- This allows us to back our judgement in those stocks for which we have greater conviction, and to embrace the asymmetry of returns through 'incubator' positions in higher risk/return stocks.

- 'Asymmetry of returns': some of our smaller positions will struggle and their share prices will fall; those that are successful may rise many fold. The latter should outweigh the former.

Low Cost

- Investors should not be penalised by high management fees.

- Low turnover and trading costs benefit shareholders.

*    For a definition of terms used see Glossary of Terms at the end of this announcement.

 

Managers' Report

Performance

During the year the Company's net asset value (NAV), with borrowings at fair value, returned 15.8%, well ahead of the FTSE World Index at 7.5%.  The information contained in such short term data is limited. Since the current team took on the management of the Monks portfolio in March 2015 the index has returned 40.3%, the Company's NAV with borrowings at fair value has returned 57.9% and the share price returned 84.4%*. Yet even this period is short compared to our own investment horizon of five years plus, or the interests of many of our shareholders which can run to decades.  Despite a positive start these remain early days for the new approach adopted in 2015.

The key metric by which we measure the success of our holdings over the short to medium term is their operational performance: we ask ourselves whether their operating results are consistent with a sustainable increase in sales, earnings per share and cash flows over a longer horizon.  For each stock, we monitor delivery against our own expectations and the company's stated strategy.  While share prices are unpredictable and random over short periods, over time we expect them to follow fundamentals, though this connection is neither immediate nor guaranteed.  Our process focuses on identifying and owning those companies most likely to deliver well above the market average growth over longer time periods; index weightings and classifications play no part in our process, though we do aim to produce a balanced and diversified portfolio of value-creating companies.  The portfolio's strong returns since 2015 are supportive of this approach, with the dominant driver of value creation being the underlying growth of our holdings, rather than clever asset allocation or market timing.

Our most recent results are also consistent with this pattern: amongst the most significant contributors to returns in the year under review were NVIDIA, Alibaba, Naspers, GrubHub, Autohome, MasterCard, Fiat Chrysler, AIA and Abiomed, each of which grew earnings by at least a third in calendar 2017. These companies represent a broad spectrum of industry exposures from insurance through automobiles and credit cards to sophisticated semi-conductors, demonstrating the range of opportunities available to global stockpickers.  The single largest contributor to returns for the year (and since March 2015) was Amazon, which grew its reported earnings 26% in 2017.  This rate was depressed, as is usual with this company, by its willingness to invest heavily in order to maximise future growth.

During the year the share price of fourteen holdings rose by more than 50% in sterling terms. Of these we would categorise eleven as 'online platforms'. Often these companies are using the internet to deliver traditional services in a way that disrupts incumbents, just as Amazon has done in retail.  These companies tend to have a number of common features: large market opportunities, asset-light business models, visionary leaders and the enticing possibility of entrenched leadership positions. When one sees a winning 'online platform' emerge, it seems simple but the competitive environment is intense; Warren Buffet said recently of Amazon's doughty leader 'I think what Jeff Bezos has done is something close to a miracle'.  Another platform that seems to be emerging as a winner is GrubHub, the American online food ordering and delivery company. We have owned this stock since late 2015 when it was one of a number of competitors in a US$200bn market. Soon after our purchase the company announced a significant investment in delivery technology and physical infrastructure to aid its service and the market groaned as this placed its fast-paced asset-light model under pressure. We applauded because in the long term it gave GrubHub a better chance of success through a definable edge - the speed of delivery and the quality of the food when it arrived.  During the year the shares more than doubled as it continued to consolidate its position through acquisitions and announced it had won a contract to provide delivery services for all KFC and Taco Bell restaurants in the US.  GrubHub now has access to over 80,000 restaurants in the US; it is four times larger than the next biggest online food delivery platform.

Growth in data and the digital world, and especially in cloud and mobile applications, has clearly benefited our investments in the semi-conductor industry where we own chip designers (NVIDIA, Infineon, Rohm and Advanced Micro Devices), manufacturers (Samsung Electronics and TSMC) and the makers of testing equipment (Advantest and Teradyne). These companies are all benefiting from very strong volume demand, together with improved pricing power as a result of historic industry consolidation. However, we are wary that in this cyclical industry such boom conditions may not last forever, especially with the Chinese investing heavily to build up their own capabilities and we have begun to bank some profits.  China is successfully switching its economic focus from low-cost manufacturing to consumption and services. The government is actively promoting the development of domestic technology champions.  Chinese consumer internet companies Alibaba, Autohome and 58.com all find themselves at the confluence of these positive developments. All performed strongly and counted amongst the leading contributors to performance for the year.

Portfolio Changes

During the year we purchased twenty new holdings and made complete sales of thirteen. These transactions are summarised below. Portfolio turnover was just under 20% which equates to a holding period of five years and is consistent with our long-term time horizon.

We categorise our holdings into four growth categories - Stalwarts, Rapid, Cyclical and Latent. These titles reflect the different ways we expect our investments to grow over the long term. The year-end weights in each category and the individual holdings can be seen in the Equity Portfolio by Growth Category table below. Although our process is based on picking individual stocks, trading activity can be understood through the lens of these growth categories.

We refreshed our Stalwart growth companies, believing that many traditional consumer staples have become expensive relative to their prospects, as their dividend characteristics have been much sought after at a time of very low bond yields.  Colgate-Palmolive was the last such holding in our portfolio before we sold it: best known for its eponymous toothpaste brand, it has delivered only 4% per annum earnings growth over the past three years yet trades on a price-earnings multiple in the mid 20's, which is well in excess of the wider market. We also sold Novo Nordisk (a leader in insulin used to treating diabetes) which is suffering pricing pressures for its products.  New Stalwart purchases were Arthur J. Gallagher (a US insurance broker), Pernod Ricard (the spirits company whose stable includes Absolut Vodka, Glenlivet and Malibu) and the US life sciences supply company, Thermo Fisher.

Rapid growth companies should be the most dynamic in the portfolio and, as noted above, for many of our technology holdings this has proven to be the case. We have trimmed some of our biggest and most successful investments (Alphabet, Amazon and Naspers for example) and reinvested into companies that are at a much earlier stage in their development. These include the two Chinese online companies, 58.com (classified advertising) and NetEase (gaming), two of the increasingly ubiquitous media streaming services Spotify and Netflix, and Genmab which is a Danish biotechnology company.  We also sold out of both TripAdvisor and Financial Engines as we lost confidence in their long-term potential in the face of disappointing progress.

Across the four growth categories, the most noticeable change has been a reduction to the weighting in Cyclical growth holdings from 29% to 22% of the portfolio. Much of this activity has focused on the US where valuations for such companies have increased since the 2016 Presidential election. The plan to 'Make America Great Again' has caused a degree of unwarranted excitement and we have reduced holdings in Martin Marietta (construction aggregates and cement), Lincoln Electric (welding equipment and consumables) and TD Ameritrade (online broking). We sold CarMax, the US second hand auto retailer whose prospects seem less certain as online business models and the rise of electric vehicles represent material threats to this industry.  New purchases included our first foray for many years into mining through the purchase of Orica, a supplier of explosives to mining companies. We think Orica should enjoy the dual drivers of a new management team with significant plans for efficiency gains together with a recovery in the mining industry after a multi-year downturn.

This reduction in Cyclical exposure has been mirrored by a rise in our Latent growth category. Latent growth companies tend to have a poor recent track record but a potential trigger to return the company to a growth profile. Our theory is that there is little, if any, growth priced in to such investments, so any improvement can have a disproportionate effect on valuation.  When growth fails to materialise the downside is generally limited as was the case with Carlsberg (like Colgate, a highly rated consumer franchise) which was sold during the year.  New investments included Advanced Micro Devices (power semi-conductors), Iida Group (a Japanese home builder), Sumitomo Mitsui Trust (a Japanese bank), Lindblad Expeditions (a niche holiday cruise company), MRC Global (a distributor of products to oil companies) and Signify (formerly called Philips Lighting, a spin out from the large Dutch industrial conglomerate), each of which has potential for significant improvement.

Monks has the freedom to invest in unquoted as well as quoted equities, though our approach is to only purchase private companies which offer opportunities that we cannot gain through listed instruments.  As a result, the exposure of the company to such holdings will always be limited. As noted above we invested in Spotify when it was a private company but it has subsequently listed in New York.

Outlook for the Portfolio

Much of our focus over recent months has been on portfolio diversification. Following a sustained period of strong performance, with a significant contribution from a relatively narrow range of technology and internet companies, we want to ensure we have plenty of under-appreciated growth stocks within the portfolio.  We have started to harvest some of the gains amongst our technology and US cyclical holdings where progress is well recognised by the market. Whilst our portfolio turnover remains low, it is encouraging to see a broad spread of new ideas coming forward, from a range of different industries and geographies.  We feel that this modest rebalancing adds to the attractiveness of the portfolio for long-term investors.

We remain generally enthusiastic about global growth, notably from Asian consumer demand and across a range of technological advances driven by the use of data in areas such as health, media, transport and trade.  In the West we see the impact of the greater use of mobile devices on a daily basis, yet in China and other Emerging Markets the momentum is even greater, supported by the positive tailwind of strong demographics, supportive governments and a huge wealth gap.  In less than one generation many of these countries could catch up with western living standards which is a mouth watering prospect for a growth investor.

It is instructive to look back over the last three financial years. In the first the global equity market was virtually unchanged (up 0.5%), in the second with the tailwind of a major sterling deprecation it rose at its strongest rate for many years (31%) and in the most recent year we saw a more steady appreciation (8%) which is close to the long-term historic average return. This shows that markets can be volatile and often respond in the short run to politics, economics and newspaper headlines, in contrast to company fundamentals which have proven less volatile and which have been the primary driver of portfolio performance. Those fundamentals should remain supportive over the long term if we can continue to uncover the best growth stocks in the world on your behalf and give them sufficient time to reach their considerable potential.

Charles Plowden,

Spencer Adair

Malcolm MacColl

5 June 2018

*   Total returns from 31 March 2015 to 30 April 2018.

Past performance is not a guide to future performance.

Total return information is sourced from Baillie Gifford/Morningstar. See disclaimer at the end of this announcement.

For a definition of terms used see Glossary of Terms at the end of this announcement.

Equity Portfolio by Growth Category as at 30 April 2018 (unaudited)

Holding Size	Growth Stalwarts	%	Rapid Growth	%	Cyclical Growth	%	Latent Growth	%
	(c.10% p.a. earnings growth)		(c.15% to 25% p.a. earnings growth)		(c.10% to 15% p.a. earnings growth through a cycle)		(earnings growth to accelerate over time)
	Company Characteristics -    Durable franchise -    Deliver robust profitability in most macroeconomic environments -    Competitive advantage includes dominant local scale, customer loyalty and strong brands		Company Characteristics -    Early stage businesses with vast growth opportunity -    Innovators attacking existing profit pools or creating new markets		Company Characteristics -    Subject to macroeconomic and capital cycles with significant structural growth prospects -    Strong management teams highly skilled at capital allocation		Company Characteristics -    Company specific catalyst will drive above average earnings in future -    Unspectacular recent operational performance and therefore out of favour
Highest conviction holdings c.2.0% each Total: 27.7%	Prudential	3.2	Amazon.com	4.1	TSMC	2.0	Apache	1.9
	Anthem	2.2	Naspers	2.8	CRH	1.6
	SAP	1.9	AIA	2.2
	Moody's	1.9	Alibaba	2.1
			Alphabet	1.8
Average sized holdings c.1.0% each Total: 49.5%	MasterCard	1.5	HDFC	1.4	Royal Caribbean Cruises	1.2	MS&AD Insurance	1.4
	Visa	1.4	Ryanair	1.3	Markel	1.1	Samsung Electronics	1.3
	Thermo Fisher Scientific	1.1	ICICI Bank	1.2	Richemont	1.1	Fiat Chrysler Autos	1.2
	Schindler	1.0	GrubHub	1.1	Banco Bradesco	1.1	Fairfax Financial	1.0
	Resmed	0.9	Baidu	1.0	EOG Resources	1.0	Bank of Ireland	0.8
	Verisk Analytics	0.9	Facebook	1.0	TD Ameritrade	0.9	Sberbank of Russia	0.8
	Bureau Veritas	0.9	MarketAxess	1.0	Atlas Copco	0.9	Signify	0.8
	Pernot Ricard	0.9	Zillow	1.0	SMC	0.8	AP Moller-Maersk	0.7
	Arthur J. Gallagher	0.9	LendingTree	0.9	Martin Marietta Materials	0.7	Sumitomo Mitsui Trust Holdings	0.7
	Olympus	0.8	Cyberagent	0.9	First Republic Bank	0.7
	Waters	0.8	58.com	0.8	CH Robinson Worldwide	0.7
			Abiomed	0.8	Leucadia National	0.7
			Renishaw	0.8	Wabtec	0.7
			Chegg	0.7	Deutsche Boerse	0.7
			Autohome	0.7
			Seattle Genetics	0.7
			Ctrip.com International	0.7
			Tesla	0.7
			NVIDIA	0.7

Equity Portfolio by Growth Category as at 30 April 2018 (unaudited)  (Ctd)

Holding Size	Growth Stalwarts	%	Rapid Growth	%	Cyclical Growth	%	Latent Growth	%
	(c.10% p.a. earnings growth)		(c.15% to 25% p.a. earnings growth)		(c.10% to 15% p.a. earnings growth through a cycle)		(earnings growth to accelerate over time)
Incubator Holdings c.0.5% each Total: 22.8%	Kansai Paint	0.4	Interactive Brokers Group	0.6	Advantest	0.6	Howard Hughes	0.6
			Spotify	0.6	Hays	0.6	Rohm	0.6
			Schibsted	0.6	SiteOne Landscape    Supply	0.6	Toyota Tsusho	0.6
			MercadoLibre	0.6			Tsingtao Brewery	0.5
			Netflix	0.6	Svenska Handelsbanken	0.5	Iida Group Holdings	0.5
			Trupanion	0.6	Persol Holdings	0.5	MRC Global	0.5
			M3	0.6	Jardine Strategic Holdings	0.5	DistributionNOW	0.5
			Infineon Technologies	0.6	Orica	0.5	Veeco Instruments	0.5
			B3 Group	0.5	PageGroup	0.5	Lindblad Expeditions    Holdings	0.5
			Myriad Genetics	0.5	OC Oerlikon	0.4
			Genmab	0.5	Sands China	0.4	Kirby	0.5
			Mail.ru Group	0.4	Teradyne	0.4	Advanced Micro Devices	0.3
			iRobot	0.4	Ritchie Bros Auctioneers	0.4	HTC	0.3
			NetEase	0.4	Lincoln Electric	0.3	Silk Invest Africa Food    Fund	0.3
			Alnylam Pharmaceuticals	0.4
			IP Group	0.3			Stericycle	0.3
			GRAIL	0.3			Dia	0.3
			Line	0.3			Ferro Alloy Resources	0.2
			China Biologic Products	0.2			MTN	0.2
			Yandex	-
	Total	20.7	Total	39.4	Total	22.1	Total	17.8

Portfolio Positioning as at 30 April 2018 (unaudited)

Thematic Exposure

			At 30 April 2018
Category			%	%
Economically Agnostic				48.8
	Internet Winners:			21.5
		Developed World	13.1
		Emerging World	8.4
	Innovation:			17.8
		Semi-conductor Chips	6.3
		Health	4.8
		Financials	1.6
		Other Innovation	5.1
	Stalwarts			9.5
US Domestic Growth				19.8
	Industrial			4.5
	Consumer			4.0
	Normalisation			3.7
	Capital Cycle			3.0
	Energy			2.4
	Government Budgets			2.2
Continued Progress of Asia/Latin America				18.0
	Emerging Markets Catch-up:			12.9
		Financial Development	7.0
		Consumer Catch-up	5.9
	Energy			2.3
	Capital Cycle			1.7
	Industrial			1.1
European and Japanese Healing				11.3
	Abenomics			3.8
	Consumer			3.1
	Industrial			2.2
	Interest Rate Normalisation			2.0
	Capital Cycle			0.2
Net Liquid Assets				1.6
Other Equities				0.5
Total Assets				100.0

Portfolio Positioning as at 30 April 2018 (unaudited) (Ctd)

Geographical Analysis

	At 30 April 2018 %	At 30 April 2017 %
North America	44.7	47.1
Continental Europe	17.0	16.4
Emerging Markets	19.4	18.9
United Kingdom	5.3	6.3
Japan	8.5	6.3
Developed Asia	3.5	3.7
Bonds	-	0.4
Net Liquid Assets	1.6	0.9
Total Assets	100.0	100.0

Sectoral Analysis

		At 30 April 2018 %	At 30 April 2017 %
Oil and Gas		3.8	2.2
Basic Materials Industrials Consumer Goods Health Care Consumer Services Financials Technology Telecommunications		1.1	0.6
		15.3	17.3
		6.7	8.0
		9.0	8.9
		19.9	21.1
		28.6	25.5
		13.8	14.9
		0.2	0.2
Total Equities		98.4	98.7
Bonds		-	0.4
Net Liquid Assets		1.6	0.9
Total Assets		100.0	100.0

 

List of Investments at 30 April 2018 (unaudited)

Name	Business	Growth category	Fair value £'000	% of total assets	Cumulative % of total assets
Amazon.com	Online retailer	Rapid	71,677	4.1
Prudential	International life insurance	Stalwart	55,006	3.1
Naspers	Media and e-commerce company	Rapid	47,950	2.7
Anthem	Healthcare insurer	Stalwart	38,077	2.2
AIA	Asian life insurer	Rapid	37,479	2.1
Alibaba	Online commerce company	Rapid	36,041	2.0
TSMC	Semiconductor manufacturer	Cyclical	35,289	2.0
SAP	Enterprise software provider	Stalwart	33,692	1.9
Apache	Oil exploration and production	Latent	32,728	1.9
Moody's	Credit rating agency	Stalwart	32,597	1.9		23.9
Alphabet	Online search engine	Rapid	31,450	1.8
CRH	Diversified building materials company	Cyclical	27,576	1.6
MasterCard	Electronic payments network and    related services	Stalwart	25,700	1.5
Visa	Electronic payments network and     related services	Stalwart	24,745	1.4
MS&AD Insurance	Japanese insurer	Latent	24,110	1.4
HDFC	Indian mortgage provider	Rapid	23,557	1.3
Samsung Electronics*	Semiconductor and consumer electronics	Latent	23,190	1.3
Ryanair	Low cost European airline	Rapid	22,202	1.3
ICICI Bank	Indian retail and corporate bank	Rapid	21,109	1.2
Royal Caribbean Cruises	Global cruise company	Cyclical	20,928	1.2		37.9
Fiat Chrysler Autos	Automobile manufacturer	Latent	20,466	1.2
Markel	Markets and underwrites speciality insurance    products	Cyclical	18,799	1.1
Richemont	Luxury goods company	Cyclical	18,571	1.1
Thermo Fisher Scientific	Scientific instruments, consumables and   chemicals	Stalwart	18,391	1.1
GrubHub	US online food service	Rapid	18,311	1.0
Banco Bradesco	Brazilian commercial bank	Cyclical	18,237	1.0
Baidu	Chines online search engine	Rapid	18,117	1.0
Fairfax Financial	Commercial insurance	Latent	17,784	1.0
Facebook	Social networking website	Rapid	17,765	1.0
Schindler	Elevator and escalator company	Stalwart	17,684	1.0		48.4
EOG Resources	Natural gas explorer and producer	Cyclical	17,035	1.0
MarketAxess	Electronic bond trading platform	Rapid	16,604	0.9
Zillow	US online real estate services	Rapid	16,475	0.9
Resmed	Develops and manufactures medical equipment	Stalwart	16,268	0.9
Verisk Analytics	Risk assessment services and decision    analytics	Stalwart	16,018	0.9
Bureau Veritas	Global testing services company	Stalwart	15,919	0.9
LendingTree	US online loan marketplace	Rapid	15,578	0.9
Pernod Ricard	Global spirits manufacturer	Stalwart	15,548	0.9
TD Ameritrade	Online brokerage firm	Cyclical	15,226	0.9
Bank of Ireland	Irish bank	Latent	15,197	0.9		57.5
Arthur J. Gallagher	Insurance broker	Stalwart	15,150	0.9
Atlas Copco	Industrial equipment	Cyclical	14,945	0.9

*    Trading of this stock was temporarily suspended at 30 April 2018 due to an impending corporate action.

List of Investments at 30 April 2018 (unaudited) (Ctd)

Name	Business	Growth category	Fair value £'000	% of total assets	Cumulative % of total assets
Cyberagent	Japanese internet advertising and content	Rapid	14,900	0.8
Sberbank of Russia	Russian commercial bank	Latent	14,745	0.8
Olympus	Optoelectronic products	Stalwart	14,080	0.8
58.com	Chinese online marketplace	Rapid	13,875	0.8
Abiomed	Manufacturer of medical implant devices	Rapid	13,491	0.8
Signify	Lighting company	Latent	13,382	0.8
SMC	Producer of factory automation equipment	Cyclical	13,176	0.8
Waters	Liquid chromatography products and   services	Stalwart	13,026	0.7	65.6
Renishaw	World leading metrology company	Rapid	12,989	0.7
Martin Marietta Materials	Cement and aggregates manufacturer	Cyclical	12,789	0.7
First Republic Bank	US retail bank	Cyclical	12,788	0.7
CH Robinson Worldwide	US freight and logistics	Cyclical	12,675	0.7
AP Moller-Maersk	Transport and logistics company	Latent	12,586	0.7
Chegg	Online educational platform	Rapid	12,466	0.7
Autohome	Chinese online automobile website	Rapid	12,349	0.7
Seattle Genetics	Antibody based therapies	Rapid	12,333	0.7
Ctrip.com International	Online travel agency	Rapid	12,162	0.7
Leucadia National	Diversified holding company	Cyclical	12,152	0.7	72.6
Sumitomo Mitsui Trust Holdings	Japanese trust bank and investment manager	Latent	11,766	0.7
Tesla	Electric cars and renewable energy solutions	Rapid	11,596	0.7
Wabtec	Rail and transit products and services	Cyclical	11,471	0.7
Deutsche Boerse	Stock exchange operator	Cyclical	11,422	0.6
NVIDIA	Visual computing technology	Rapid	11,400	0.6
Interactive Brokers Group	Global electronic trading platform	Rapid	11,189	0.6
Spotify	Online music streaming service	Rapid	11,042	0.6
Schibsted	Media and classified advertising platforms	Rapid	10,913	0.6
Advantest	Semiconductor testing services	Cyclical	10,865	0.6
MercadoLibre	Latin American e-commerce platform	Rapid	10,863	0.6	78.9
Hays	Recruitment consultancy	Cyclical	10,665	0.6
Netflix	Subscription service for TV shows and movies	Rapid	10,571	0.6
Trupanion	Pet health insurance provider	Rapid	10,486	0.6
M3	Online medical services	Rapid	9,950	0.6
SiteOne Landscape Supply	US distributor of landscaping supplies	Cyclical	9,850	0.6
Howard Hughes	US real estate developer	Latent	9,680	0.6
Rohm	Electrical components	Latent	9,636	0.5
Toyota Tsusho	African auto distributor	Latent	9,524	0.5
Infineon Technologies	German semiconductor manufacturer	Rapid	9,345	0.5
Tsingtao Brewery	Chinese brewer	Latent	9,058	0.5	84.5
B3 Group	Brazilian stock exchange operator	Rapid	8,986	0.5
Svenska Handelsbanken	Swedish retail bank	Cyclical	8,954	0.5
Persol Holdings	Employment and outsourcing services	Cyclical	8,915	0.5
Iida Group Holdings	Japanese house builder	Latent	8,911	0.5
MRC Global	Oilfield drilling equipment distributor	Latent	8,839	0.5
DistributionNOW	Oilfield drilling equipment distributor	Latent	8,675	0.5

 

List of Investments at 30 April 2018 (unaudited) (Ctd)

Name	Business	Growth category	Fair value £'000		% of total assets	Cumulative % of total assets
Veeco Instruments	Semiconductor equipment company	Latent	8,623	0.5
Lindblad Expeditions   Holdings	Specialist vacation operator	Latent	8,528	0.5
Jardine Strategic Holdings	Asian retail/auto dealerships and property	Cyclical	8,472	0.5
Myriad Genetics	Genetic testing company	Rapid	8,266	0.5		89.5
Orica	Australian industrial explosives company	Cyclical	8,261	0.5
Genmab	Biotechnology company	Rapid	8,048	0.5
Kirby	US barge operator	Latent	7,976	0.5
PageGroup	Recruitment consultancy	Cyclical	7,869	0.5
OC Oerlikon	Industrial equipment manufacturer	Cyclical	7,726	0.4
Sands China	Macau casino operator	Cyclical	7,667	0.4
Teradyne	Semiconductor testing equipment manufacturer	Cyclical	7,562	0.4
Mail.ru Group	Russian internet and communication services	Rapid	7,303	0.4
Richie Bros Auctioneers	Industrial equipment auctioneer	Cyclical	7,246	0.4
Kansai Paint	Paint manufacturer	Stalwart	7,159	0.4		93.9
iRobot	Domestic and military robot manufacturer	Rapid	7,026	0.4
NetEase	Chinese online gaming company	Rapid	7,001	0.4
Alnylam Pharmaceuticals	RNA interference based biotechnology	Rapid	6,751	0.4
IP Group	Intellectual property commercialisation	Rapid	5,857	0.3
GRAIL†	Blood testing for early cancer detection	Rapid	5,810	0.3
Advanced Micro Devices	Global semiconductor company	Latent	5,800	0.3
Lincoln Electric	Welding equipment manufacturer and services	Cyclical	5,704	0.3
Line	Online messaging service	Rapid	5,484	0.3
HTC	Taiwanese electronic device manufacturer	Latent	5,345	0.3
Silk Invest Africa Food    Fund†	Africa focused private equity fund	Latent	5,009	0.3		97.2
Stericycle	Regulated medical waste management services	Latent	4,603	0.3
Dia	Discount food retailer	Latent	4,555	0.3
China Biologic Products	Biopharmaceuticals	Rapid	4,145	0.2
Ferro Alloy Resources†	Vanadium mining	Latent	3,432	0.2
MTN	African wireless telecom company	Latent	3,153	0.2
Yandex	Russian internet search and online services	Rapid	405	-
Total Investments			1,730,513	98.4		98.4
Net Liquid Assets			29,028		1.6	1.6
Total Assets at Fair Value			1,759,541		100.0	100.0

 

†      Denotes an unlisted security

Income statement (unaudited)

	For the year ended 30 April 2018			For the year ended 30 April 2017
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Gains on investments (note 2)	-	211,299	211,299	-	403,486	403,486
Currency gains/(losses)	-	3,216	3,216	-	(3,264)	(3,264)
Income	19,759	-	19,759	17,593	-	17,593
Investment management fee	(6,568)	-	(6,568)	(6,011)	-	(6,011)
Other administrative expenses	(1,598)	-	(1,598)	(1,261)	-	(1,261)
Net return before finance costs and taxation	11,593	214,515	226,108	10,321	400,222	410,543
Finance costs of borrowings	(4,410)	-	(4,410)	(3,910)	-	(3,910)
Net return on ordinary activities before taxation	7,183	214,515	221,698	6,411	400,222	406,633
Tax on ordinary activities	(1,595)	-	(1,595)	(1,368)	-	(1,368)
Net return on ordinary activities after taxation	5,588	214,515	220,103	5,043	400,222	405,265
Net return per ordinary share (note 4)	2.61p	100.08p	102.69p	2.36p	187.05p	189.41p
Note: Dividends per share paid and payable in respect of the year (note 5)	1.40p			1.25p

The total column of this statement represents the profit and loss account of the Company. The supplementary revenue and capital columns are prepared under guidance published by the Association of Investment Companies.

All revenue and capital items in this statement derive from continuing operations.

A Statement of Comprehensive Income is not required as the Company does not have any other comprehensive income and the net return on ordinary activities after taxation is both the profit and comprehensive income for the year.

 

Balance sheet (unaudited)

	At 30 April 2018 £'000	At 30 April 2017 £'000
Fixed assets
Investments held at fair value through profit or loss	1,730,513	1,507,077
Current assets
Debtors	9,009	7,816
Cash and cash equivalents	22,974	15,208
	31,983	23,024
Creditors
Amounts falling due within one year (note 6)	(66,120)	(76,217)
Net current liabilities	(34,137)	(53,193)
Total assets less current liabilities	1,696,376	1,453,884
Creditors
Amounts falling due after more than one year (note 6)	(39,842)	(39,810)
	1,656,534	1,414,074
Capital and reserves
Share capital	10,857	10,698
Share premium account	35,973	11,100
Capital redemption reserve	8,700	8,700
Capital reserve	1,549,551	1,335,036
Revenue reserve	51,453	48,540
Shareholders' funds	1,656,534	1,414,074
Shareholders' funds per ordinary share (note 7) (after deducting borrowings at book value)	762.9p	660.9p
Net asset value per ordinary share (note7) (after deducting borrowings at fair value)	759.0p	656.8p
Net asset value per ordinary share (note 7) (after deducting borrowings at par)	762.8p	660.8p
Ordinary shares in issue (note 8)	217,143,859	213,963,859

 

Statement of changes in equity (unaudited)

For the year ended 30 April 2018

	Share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Capital reserve £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 May 2017	10,698	11,100	8,700	1,335,036	48,540	1,414,074
Net return on ordinary activities after taxation	-	-	-	214,515	5,588	220,103
Ordinary shares issued (note 8)	159	24,873	-	-	-	25,032
Dividends paid during the year (note 5)	-	-	-	-	(2,675)	(2,675)
Shareholders' funds at 30 April 2018	10,857	35,973	8,700	1,549,551	51,453	1,656,534

For the year ended 30 April 2017

	Share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Capital reserve £'000	Capital reserve* £'000	Shareholders' funds £'000
Shareholders' funds at 1 May 2016	10,698	11,100	8,700	934,814	45,637	1,010,949
Net return on ordinary activities after taxation	-	-	-	400,222	5,043	405,265
Dividends paid during the year (note 5)	-	-	-	-	(2,140)	(2,140)
Shareholders' funds at 30 April 2017	10,698	11,100	8,700	1,335,036	48,540	1,414,074

*      The Capital Reserve balance at 30 April 2018 includes holding gains on investments of £567,547,000 (2017 - gains of £453,149,000).

 

Cash flow statement (unaudited)

	Year ended 30 April 2018		Year ended 30 April 2017
	£'000	£'000	£'000	£'000
Cash flows from operating activities
Net return on ordinary activities before taxation		221,698		406,633
Net (gains) on investments		(211,299)		(403,486)
Currency (gains)/losses		(3,216)		3,264
Amortisation of fixed income book cost		(170)		(409)
Finance costs of borrowings		4,410		3,910
Overseas tax incurred		(1,536)		(1,348)
Changes in debtors and creditors		(1,069)		627
Cash from operations*		8,818		9,191
Interest paid		(4,347)		(3,858)
Net cash inflow from operating activities		4,471		5,333
Cash flows from investing activities
Acquisitions of investments	(331,951)		(183,649)
Disposals of investments	315,713		161,830
Net cash outflow from investing activities		(16,238)		(21,819)
Cash flows from financing activities
Equity dividends paid	(2,675)		(2,140)
Ordinary shares issued	23,074		-
Borrowings drawn down	-		15,608
Net cash inflow from financing activities		20,399		13,468
Increase/(decrease) in cash and cash equivalents		8,632		(3,018)
Exchange movements		(866)		2,296
Cash and cash equivalents at 1 May		15,208		15,930
Cash and cash equivalents at 30 April		22,974		15,208

†      Cash from operations includes dividends received of £18,613,000 (2017 - £17,303,000) and interest received of £78,000 (2017 - nil).

 

Notes to the condensed financial statements (unaudited)

1.	The unaudited preliminary financial results for the year to 30 April 2018 have been prepared in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. The accounting policies adopted are consistent with those of the previous financial year.
2. 3.	Gains on investments	2018 £'000				2017 £'000
	Realised gains on sales	96,901				13,812
	Movement in investment holding gains and (losses)	114,398				389,674
	Total gains on investments	211,299				403,486
	Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, has been appointed by the Company as its Alternative Investment Fund Manager (AIFM) and Company Secretary. The investment management function has been delegated to Baillie Gifford & Co. The management agreement can be terminated on six months' notice. The annual management fee payable for the year ended 30 April 2018 was 0.45% on the first £750 million of total assets and 0.33% on the remaining total assets, where total assets is defined as the total value of all assets held less all liabilities (other than any liability in the form of debt intended for investment purposes). For the year to 30 April 2017 the annual management fee was 0.45% of total assets less current liabilities. With effect from 1 May 2018 the annual management fee is 0.45% on the first £750 million of total assets 0.33% on the next £1 billion of total assets and 0.30% on the remaining total assets. All debt drawn down at 30 April 2018 is intended for investment purposes.
4.	Net Return per Ordinary Share	2018				2017
	Revenue return	2.61p				2.36p
	Capital return	100.08p				187.05p
	Total return	102.69p				189.41p
	Revenue return per ordinary share is based on the net revenue return on ordinary activities after taxation of £5,588,000 (2017 - £5,043,000) and on 214,344,215 (2017 - 213,963,859) ordinary shares of 5p, being the weighted average number of ordinary shares in issue during the year. Capital return per ordinary share is based on the net capital gain for the financial year of £214,515,000 (2017 - gain of £400,222,000) and on 214,344,215 (2017 - 213,963,859) ordinary shares, being the weighted average number of ordinary shares in issue during the year. There are no dilutive or potentially dilutive shares in issue.
5.	Ordinary Dividends		2018	2017			2018 £'000	2017 £'000
	Amounts recognised as distributions in the year:
	Previous year's final (paid 4 August 2017)		1.25p	1.00p			2,675	2,140
	We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 1158 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £5,588,000 (2017 - £5,043,000).
			2018	2017			2018 £'000	2017 £'000
	Amounts paid and payable in respect of the financial year:
	Proposed final (payable 7 September 2018)		1.40p	1.25p			3,040	2,675

Notes to the condensed financial statements (unaudited) (ctd)

5.	If approved, the recommended final dividend on ordinary shares will be paid on 7 September 2018 to shareholders on the register at the close of business on 3 August 2018. The ex-dividend date is 2 August 2018. The Company's Registrar offers a Dividend Reinvestment Plan and the final date for elections for this dividend is 16 August 2018.
6.	At 30 April 2018 the book value of the Company's borrowings amounted to £103m (2017 - £107m), comprising a £40m   6 3/8% debenture stock repayable in 2023 (2017 - £40m) and a short-term bank loan of US$87m (2017 - US$87m). The fair value of borrowings at 30 April 2018 was £111m (2017 - £116m).
7.	Shareholders' Funds and Net Asset Value
	Shareholders' funds have been calculated in accordance with the provisions of FRS 102. However the net asset value figures in the table below have been calculated on the basis of shareholders' rights to reserves as specified in the Articles of Association of the Company. A reconciliation of the two figures is as follows:
		2018 £'000	2018 Per share	2017 £'000	2017 Per share
	Shareholders' funds	1,656,534	762.9p	1,414,074	660.9p
	Balance of debenture issue expenses not yet amortised	(158)	(0.1p)	(190)	(0.1p)
	Net asset value (after deducting borrowings at par)	1,656,376	762.8p	1,413,884	660.8p
	The per share figures above are based on 217,143,859 (2017 - 213,963,859) ordinary shares of 5p, being the number of ordinary shares in issue at the year end. Deducting borrowings at fair value would have the effect of reducing net asset value per ordinary share from 762.8p to 759.0p. At 30 April 2017 the effect would have been to reduce net asset value per ordinary share from 660.8p to 656.8p.
8.	At 30 April 2018 the Company had authority to buy back 32,073,182 ordinary shares and to allot or sell from treasury 18,216,380 ordinary shares without application of pre-emption rights. In the year to 30 April 2018, the Company issued 3,180,000 ordinary shares (nominal value of £159,000) at a premium to net asset value, raising net proceeds of £25,032,000 (2017 - nil). No shares were bought back during the year and no shares are held in treasury. Under the provisions of the Company's Articles of Association share buy-backs are funded from the capital reserve.
9.	The financial information set out above does not constitute the Company's statutory accounts for the year ended 30 April 2018. The financial information for 2017 is derived from the financial statements for 2017 which have been delivered to the Registrar of Companies. The Auditors have reported on the 2017 accounts; their report was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not contain a statement under sections 498 (2) or 498(3) of the Companies Act 2006. The statutory accounts for 2018 will be finalised on the basis of the financial information presented in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The Auditors have advised the Company that they do not expect their report on the 2018 statutory accounts to include any modification or emphasis of matter statements.
10.	The Report and Accounts will be available on the Managers' website www.monksinvestmenttrust.co.uk‡ on or around 27 June 2018.

‡      Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

 

Glossary of Terms

Total Assets

The total value of all assets held less all liabilities (other than liabilities in the form of borrowings).

Shareholders' Funds and Net Asset Value

Shareholders' Funds is the value of all assets held less all liabilities, with borrowings deducted at book cost. Net Asset Value (NAV) is the value of all assets held less all liabilities, with borrowings deducted at either fair value or par value as described below. Per share amounts are calculated by dividing the relevant figure by the number of ordinary shares in issue.

Borrowings at Fair Value

Borrowings are valued at an estimate of market worth. The fair value of the Company's 6 ³/₈% debenture stock 2023 is based on the closing market offer price on the London Stock Exchange.  The fair value of the Company's short term bank borrowings is equivalent to its book value.

Borrowings at Par Value

Borrowings are valued at nominal par value.

Discount/Premium

As stockmarkets and share prices vary, an investment trust's share price is rarely the same as its NAV. When the share price is lower than the NAV per share it is said to be trading at a discount. The size of the discount is calculated by subtracting the share price from the NAV per share and is usually expressed as a percentage of the NAV per share.

If the share price is higher than the NAV per share, this situation is called a premium.

Net Liquid Assets

Net liquid assets comprise current assets less current liabilities (excluding borrowings).

Total Return

The total return is the return to shareholders after reinvesting the dividend on the date that the share price goes ex-dividend.

Ongoing Charges

The total expenses (excluding borrowing costs) incurred by the Company as a percentage of the average net asset value (with debt at fair value).

Active Share

Active share, a measure of how actively a portfolio is managed, is the percentage of the portfolio that differs from its comparative index. It is calculated by deducting from 100 the percentage of the portfolio that overlaps with the comparative index. An active share of 100 indicates no overlap with the index and an active share of zero indicates a portfolio that tracks the index.

Gearing

At its simplest, gearing is borrowing. Just like any other public company, an investment trust can borrow money to invest in additional investments for its portfolio. The effect of the borrowing on the shareholders' assets is called 'gearing'. If the Company's assets grow, the shareholders' assets grow proportionately more because the debt remains the same. But if the value of the Company's assets falls, the situation is reversed. Gearing can therefore enhance performance in rising markets but can adversely impact performance in falling markets. The level of gearing can be adjusted through the use of derivatives which affect the sensitivity of the value of the portfolio to changes in the level of markets.

Potential gearing is the Company's borrowings expressed as a percentage of shareholders' funds.

Invested gearing is the Company's borrowings at par less cash and cash equivalents expressed as a percentage of shareholders' funds.

Effective gearing, as defined by the Board and Managers of Monks, is the Company's borrowings at par less cash, brokers' balances and investment grade bonds maturing within one year, expressed as a percentage of shareholders' funds.

Equity gearing is the Company's borrowings at par less cash, brokers' balances and all bonds, expressed as a percentage of shareholders' funds*.

Leverage

For the purposes of the Alternative Investment Fund Managers (AIFM) Directive, leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company's exposure and its net asset value and can be calculated on a gross and a commitment method. Under the gross method, exposure represents the sum of the Company's positions after the deduction of sterling cash balances, without taking into account any hedging and netting arrangements. Under the commitment method, exposure is calculated without the deduction of sterling cash balances and after certain hedging and netting positions are offset against each other.

*      As adjusted to take into account the gearing impact of any derivative holdings.

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FTSE Index data

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