Half Yearly Report

RNS Number : 6212Y

Monks Investment Trust PLC

02 December 2014

 



RNS Announcement

The Monks Investment Trust PLC

Results for the half-year to 31 October 2014

¾  The net asset value total return over the six months to the end of October 2014 was 4.9% and the share price return was 5.3%.  The total return on the FTSE World Index in sterling terms was 8.0% and the median total return of AIC global sector trusts was 4.4% in net asset value terms and 4.1% in share price terms.

¾  Earnings per share were 2.26p compared to 1.99p in the corresponding period.  The interim dividend is 0.50p (0.50p in the corresponding period.)

¾  Our relatively high UK weighting and low US weighting contributed to relative underperformance versus the index as did our exposure to oil and gas related companies and our preference for small and medium sized companies over the very largest ones.

¾  The Board and Managers continue to believe that focusing on bottom-up stock selection and being prepared to deviate from indices in order to hold a portfolio of stocks combining good growth prospects with reasonable valuations will prove more rewarding in the long term than mimicking a benchmark or attempting to jump onto passing bandwagons.

¾  Taken as a whole, the holdings in the portfolio have grown, and are forecast to grow, their earnings more rapidly and generate a similar return on equity, despite employing less debt, than the combination of companies comprising the index.

The Monks Investment Trust PLC invests internationally in order to achieve capital growth, which takes priority over income and dividends. Monks is managed by Baillie Gifford, the independent Edinburgh based fund management group with around £115 billion under management and advice as at 1 December 2014.

Past performance is not a guide to future performance. 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 UK 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^‡

‡    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. 

For further information please contact:

James Budden, Baillie Gifford & Co  

Tel: [phone] or 07507 201208

Roland Cross, Director, Broadgate Mainland

Tel: [phone]

The Monks Investment Trust PLC

The following is the unaudited Half-Yearly Financial Report for the six months to 31 October 2014.

Responsibility statement

We confirm that to the best of our knowledge:

a)   the condensed set of financial statements has been prepared in accordance with the Accounting Standards Board's statement 'Half-Yearly Financial Reports';

b)   the Half-Yearly Management Report includes a fair review of the information required by Disclosure and Transparency Rules 4.2.7R (indication of important events during the first six months, and their impact on the financial statements, and a description of principal risks and uncertainties for the remaining six months of the year); and

c)   the Half-Yearly Financial Report includes a fair review of the information required by Disclosure and Transparency Rules 4.2.8R (disclosure of related party transactions and changes therein).

By order of the Board

JGD Ferguson

Chairman

2 December 2014

The Monks Investment Trust PLC

Half-yearly management report

Results

Over the six months to 31 October the net asset value total return, with borrowings deducted at fair value, was 4.9% and the share price total return was 5.3%. Both numbers were lower than the 8.0% returned by the FTSE World Index over the same period. Performance was roughly in line with the average return for investment trusts in the AIC global sector, as the median return of trusts in the sector was 4.4% in total return terms and 4.1% in share price terms.

Our relatively high weighting in the UK market and corresponding low weighting in the US, contributed to relative underperformance versus the index, as did our preference for small and medium-sized companies over the very largest ones in the markets. The absence of the heavyweights of the technology-rich US Nasdaq index from our portfolio was particularly painful during this period. That index produced a total return of 19.5% in sterling terms in the six months to the end of October while the more broadly representative US index, the S&P 500 returned 14.2% and the total return for the FTSE All Share in the UK was minus 1.6%.

Earnings per share were 2.26p: this is an increase of 13.6% from the 1.99p for the corresponding period a year ago. The main reason for the increase in earnings was a reduction in borrowing following our repayment of bank loans. This more than offset a reduction in income from fixed income investments arising from disposals. The Company's investment objective makes capital appreciation a higher priority than income or dividends and earnings are volatile, making it hard to predict the outcome for the full year at the interim stage. The Board has declared an interim dividend of 0.50p, to be paid in January 2015.

During the six months there were notable positive developments for a number of companies in the portfolio which resulted in these holdings making positive contributions to performance. Alnylam Pharmaceuticals announced positive clinical trial results, lending support to the investment case based on its innovative approach to tackling hard-to-treat diseases by blocking the action of the genes causing the disease. Our largest holding, IP Group, which commercialises ideas originating in leading universities, announced a significant increase in its net asset value, helped by the listing of a number of portfolio companies. It is now taking its successful UK business model to the United States. Burger King, the US-based fast food chain has a new management team that has been making operational changes to improve profitability and during the period they announced a deal to take over the Canadian chain, Tim Hortons, providing even more scope for future growth. Go-Ahead, the UK bus and train franchise group, was awarded the Thameslink rail franchise and resumed dividend growth after posting encouraging results. There was also good news for our UK quantum dot company, Nanoco. Its commercial partner, Dow Chemical, announced that it is to build a new plant to mass-produce Nanoco's quantum dots in South Korea for sale to manufacturers of television and computer screens.

Our US and Emerging Market internet-related businesses such as MercadoLibre, Naspers and Facebook also performed well during the period but our two New Zealand-based companies in this area, TradeMe and Xero, performed poorly owing to concerns about their competitive positions.

Despite some positive news from the exploration company, President Energy, which announced the discovery of oil in Paraguay, this was a bad six months for oil and gas-related companies owing to a sharp fall in the oil price and the imposition of sanctions affecting drilling activity in Russia. Our holdings in Enquest, a UK exploration and production company, the oil drillers Seadrill and North Atlantic Drilling along with the oil service company Petrofac were a notable drag on performance during the period.

Investment Changes

During the six months to 31 October we sold a net £10.1m of equities and a net £9.2m of bonds. A total of £15.9m was used to repurchase 4.2m shares. Within equities the largest reduction was in the UK and the largest net addition was in Europe followed by North America. The reduction in bonds represents the sale of the balance of our holding in US dollar-denominated Venezuelan government bonds. The distribution of investments by geography is shown below.

There are no outstanding derivative positions and gearing is managed by holding cash. Effective gearing at the end of October was nil% compared to minus 1% at the end of April. 

The Board

Jeremy Tigue joined the Board on 30 September and will stand for election at the AGM next year. He has extensive experience of the management of investment trusts, having stepped down as fund manager of Foreign & Colonial Investment Trust plc earlier this year after seventeen years. He retired from F&C Management on 30 September 2014 after thirty-three years.

Outlook

Since the onset of the global financial crisis more than five years ago, the investment background has been characterised by low growth, low interest rates and the outright purchase of financial assets by central banks. The combination has been extremely supportive for the prices of both bonds and shares. Extremely low returns on cash have forced savers into either penury or ever riskier forms of investment, and central bank purchases of the safer types of bonds have pushed investors even further towards embracing risk in order to secure returns. The decision of the US Federal Reserve to bring its programme of asset purchases to an end is therefore a potentially important milestone. Its impact may, however, be mitigated by the expansion of Bank of Japan's asset purchase programme and expectations of something similar being attempted by the European Central Bank. The US economy appears healthier than those of many of its trading partners, helped in part by the growth in production of oil and gas from shale. Europe is facing the risk of deflation, the growth of the Chinese economy is slowing, and Japan remains in a fragile condition. Given the weakness of global growth and the deflationary impact of lower energy and other commodity prices it seems unlikely that inflation will become a problem beyond the boundaries of states like Venezuela and so it seems more likely than not that interest rates will stay low for some time.

If the background is likely to remain similar in most important respects to that of the last few years, we have to ask ourselves whether the pattern of relative performance within markets will also be a straightforward extrapolation of the recent past. In particular, we have to ask whether the strong relative performance of US equities will continue and whether the very largest companies in the market will perform better than their smaller counterparts. While this may happen, there are also reasons to believe that the relatively elevated valuations that are prevalent in the US market make companies vulnerable to disappointment and, over the long run, the largest companies in any market rarely prove to be as rewarding as investments in smaller companies with more scope to grow.

We continue to believe that focusing on bottom-up stock selection and being prepared to deviate from the asset allocation suggested by market capitalisation-weighted indices, in order to hold a portfolio of stocks combining good growth prospects with reasonable valuations, will ultimately prove more rewarding in the long term than mimicking a benchmark or attempting to jump onto passing bandwagons.

Taken as a whole, the holdings in our portfolio have grown their earnings more rapidly than the aggregated earnings of the companies in the FTSE World Index, and are forecast to grow their earnings more rapidly and generate a similar return on equity, despite employing less gearing, than the combination of companies making up the index.  These are the characteristics of a portfolio which should deliver superior performance over the long term.

The principal risks and uncertainties facing the Company are set out in note 10.

Past performance is not a guide to future performance.

The Monks Investment Trust PLC

Thirty largest equity holdings at 31 October 2014 (unaudited)

Name	Region	Business	Value £'000	% of total assets
IP Group	United Kingdom	Intellectual property commercialisation	37,923	3.7
Harley-Davidson	North America	Motorcycle manufacturer	21,312	2.1
Wellpoint	North America	Healthcare insurer	21,223	2.1
Taiwan Semiconductor   Manufacturing Co	Emerging Markets	Semiconductor manufacturer	21,164	2.0
The Priceline Group Inc	North America	Online travel agent	20,968	2.0
Alnylam Pharmaceuticals	North America	Biotechnology - RNA interference	20,117	1.9
Seek	Developed Asia	Online recruitment	19,419	1.9
Sky Deutschland	Continental Europe	German pay television services	19,291	1.9
Visa Inc - Class A Shares	North America	Global electronic payments network and related    services	18,257	1.8
TripAdvisor	North America	Online travel review platform	18,152	1.8
Burger King Worldwide	North America	Fast food restaurants	18,097	1.8
Go-Ahead Group	United Kingdom	Bus and rail operator	17,707	1.7
First Republic Bank	North America	Banking	16,929	1.6
DistributionNOW	North America	Oilfield drilling equipment manufacturer	16,372	1.6
TD Ameritrade	North America	Online brokerage firm	15,953	1.5
Novozymes	Continental Europe	Enzyme manufacturer	15,276	1.5
Martin Marietta Materials	North America	Cement and aggregates producer	15,197	1.5
Fuchs Petrolub	Continental Europe	Speciality industrial and automotive lubricants	14,585	1.4
MercadoLibre	Emerging Markets	E-commerce platform	14,337	1.4
Nanoco Group	United Kingdom	Quantum dot manufacturer	14,141	1.4
Kone	Continental Europe	Elevator manufacture and servicing	14,050	1.4
Novo Nordisk	Continental Europe	Pharmaceuticals company	13,961	1.3
Facebook	North America	Social networking website	13,518	1.3
IHS	North America	Specialist statistics and analytics	13,322	1.3
Tokyo Electron	Japan	Semiconductor production equipment	13,175	1.3
TJX Companies	North America	Apparel and home fashion retailer	13,171	1.3
Shimano	Japan	Bicycle and fishing equipment manufacturer	13,046	1.3
Reinet Investments	Continental Europe	Rupert family holding company	12,983	1.3
Naspers	Emerging Markets	Media and e-commerce	12,958	1.3
Gerberit	Continental Europe	Manufacturer of high-end plumbing products	12,539	1.2
			509,143	49.6

The Monks Investment Trust PLC

Distribution of portfolio (unaudited)

Geographical Analysis

	At 31 October 2014		At 30 April 2014
	Total  Assets %	Effective Exposure * %	Total Assets %	Effective Exposure * %
North America	36.4	36.4	32.4	32.7
Continental Europe	19.1	19.1	18.5	18.6
United Kingdom	17.9	17.9	21.6	21.8
Emerging Markets	11.3	11.3	10.5	9.9
Japan	5.5	5.5	5.2	5.1
Net Liquid Assets	4.0	4.0	3.9	3.9
Developed Asia	3.0	3.0	3.8	3.9
Bonds	2.8	2.8	4.1	4.1
	100.0	100.0	100.0	100.0

*      The effective exposure takes into account the exposure of derivative holdings which may differ substantially from their market value. There were no derivative holdings at 31 October 2014.

Sectoral Analysis

		At 31 October 2014 %	At 30 April 2014 %
Equities:	Oil and Gas	6.9	9.0
	Basic Materials	2.8	2.5
	Industrials	11.3	9.8
	Consumer Goods	12.7	10.6
	Health Care	9.0	8.3
	Consumer Services	19.8	18.1
	Financials	22.3	24.3
	Technology	8.4	9.4
		93.2	92.0
Bonds		2.8	4.1
Net Liquid Assets		4.0	3.9
		100.0	100.0

The Monks Investment Trust PLC

Income statement (unaudited)

	For the six months ended 31 October 2014			For the six months ended 31 October 2013			For the year ended 30 April 2014
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Gains on sales of investments	-	30,760	30,760	-	43,784	43,784	-	80,404	80,404
Changes in investment  holding gains and (losses)	-	7,291	7,291	-	32,648	32,648	-	(48,956)	(48,956)
Currency gains/(losses)	-	2,063	2,063	-	(1,273)	(1,273)	-	(2,799)	(2,799)
Income from investments and interest receivable	9,647	-	9,647	9,893	-	9,893	21,585	-	21,585
Investment management fee (note 3)	(2,292)	-	(2,292)	(2,431)	-	(2,431)	(4,778)	-	(4,778)
Other administrative expenses	(516)	-	(516)	(436)	-	(436)	(903)	-	(903)
Net return before finance costs and  taxation	6,839	40,114	46,953	7,026	75,159	82,185	15,904	28,649	44,553
Finance costs of borrowings	(1,291)	-	(1,291)	(2,018)	-	(2,018)	(3,783)	-	(3,783)
Net return on ordinary activities before taxation	5,548	40,114	45,662	5,008	75,159	80,167	12,121	28,649	40,770
Tax on ordinary activities	(433)	-	(433)	(419)	-	(419)	(940)	-	(940)
Net return on ordinary activities after taxation	5,115	40,114	45,229	4,589	75,159	79,748	11,181	28,649	39,830
Net return per ordinary share (note 4)	2.26p	17.74p	20.00p	1.99p	32.55p	34.54p	4.87p	12.49p	17.36p
Note: Dividends per share paid and payable in respect of the period (note 5)	0.50p			0.50p			3.95p

The total column of this statement is the profit and loss account of the Company.

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

A Statement of Total Recognised Gains and Losses is not required as all the gains and losses of the Company have been reflected in the above statement.

The Monks Investment Trust PLC

Balance sheet (unaudited)

	At 31 October 2014 £'000	At 31 October 2013 £'000	At 30 April 2014 £'000
Fixed assets
Investments held at fair value through profit or loss	992,513	1,035,266	973,559
Current assets
Debtors	13,618	4,863	2,139
Investments held at fair value through profit or loss	-	1,969	-
Cash and deposits	47,557	55,013	41,592
	61,175	61,845	43,731
Creditors
Amounts falling due within one year:
Bank loan	-	(40,000)	-
Other creditors	(19,564)	(2,449)	(4,682)
	(19,564)	(42,449)	(4,682)
Net current assets	41,611	19,396	39,049
Total assets less current liabilities	1,034,124	1,054,662	1,012,608
Creditors
Amounts falling due after more than one year:
Debenture stock (note 6)	(39,728)	(39,696)	(39,712)
Total net assets	994,396	1,014,966	972,896
Capital and reserves
Called up share capital	11,186	11,407	11,394
Share premium	11,100	11,100	11,100
Capital redemption reserve	8,212	7,991	8,004
Capital reserve	919,091	942,403	894,882
Revenue reserve	44,807	42,065	47,516
Shareholders' funds	994,396	1,014,966	972,896
Net asset value per ordinary share (after deducting borrowings at fair value) (note 6)	442.6p	443.0p	425.2p
Net asset value per ordinary share (after deducting borrowings at par)	444.4p	444.8p	426.8p
Ordinary shares in issue (note 7)	223,711,859	228,137,859	227,887,859

The Monks Investment Trust PLC

Reconciliation of movements in shareholders' funds (unaudited)

For the six months ended 31 October 2014

	Share capital £'000	Share premium £'000	Capital redemption reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 May 2014	11,394	11,100	8,004	894,882	47,516	972,896
Net return on ordinary activities after taxation	-	-	-	40,114	5,115	45,229
Shares purchased for cancellation (note 7)	(208)	-	208	(15,905)	-	(15,905)
Dividends paid during the period (note 5)	-	-	-	-	(7,824)	(7,824)
Shareholders' funds at 31 October 2014	11,186	11,100	8,212	919,091	44,807	994,396

For the six months ended 31 October 2013

	Share capital £'000	Share premium £'000	Capital redemption reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 May 2013	12,017	11,100	7,381	910,342	45,387	986,227
Net return on ordinary activities after taxation	-	-	-	75,159	4,589	79,748
Shares purchased for cancellation	(610)	-	610	(43,098)	-	(43,098)
Dividends paid during the period (note 5)	-	-	-	-	(7,911)	(7,911)
Shareholders' funds at 31 October 2013	11,407	11,100	7,991	942,403	42,065	1,014,966

For the year ended 30 April 2014

	Share capital £'000	Share premium £'000	Capital redemption reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 May 2013	12,017	11,100	7,381	910,342	45,387	986,227
Net return on ordinary activities after taxation	-	-	-	28,649	11,181	39,830
Shares purchased for cancellation	(623)	-	623	(44,109)	-	(44,109)
Dividends paid during the year (note 5)	-	-	-	-	(9,052)	(9,052)
Shareholders' funds at 30 April 2014	11,394	11,100	8,004	894,882	47,516	972,896

*      The Capital Reserve balance at 31 October 2014 includes investment holding gains on investments of

         £230,668,000 (31 October 2013 - gains of £304,982,000; 30 April 2014 - gains of £223,377,000).

The Monks Investment Trust PLC

Condensed cash flow statement (unaudited)

	Six months to  31 October 2014 £'000	Six months to  31 October 2013 £'000	Year to  30 April 2014 £'000
Net cash inflow from operating activities	6,524	7,681	15,903
Net cash outflow from servicing of finance	(1,275)	(1,987)	(3,743)
Total tax paid	(430)	(445)	(955)
Net cash inflow from financial investment	21,001	71,064	95,365
Equity dividends paid	(7,824)	(7,911)	(9,052)
Net cash inflow before financing	17,996	68,402	97,518
Shares purchased for cancellation	(14,094)	(50,707)	(51,718)
Borrowings repaid	-	-	(40,000)
Increase in cash	3,902	17,695	5,800
Reconciliation of net cash flow to movement in net funds/(debt)
Increase in cash in the period	3,902	17,695	5,800
Translation difference	2,063	(1,273)	(2,799)
Net cash outflow from borrowings	-	-	40,000
Other non-cash changes	(16)	(17)	(33)
Movement in net funds/(debt) in the period	5,949	16,405	42,968
Net funds/(debt) at start of the period	1,880	(41,088)	(41,088)
Net funds/(debt) at end of the period	7,829	(24,683)	1,880
Reconciliation of net return before finance costs and taxation to net cash inflow from operating activities
Net return before finance costs and taxation	46,953	82,185	44,553
Net gains on investments	(38,051)	(76,432)	(31,448)
Currency (gains)/losses	(2,063)	1,273	2,799
Amortisation of fixed income book cost	(235)	(240)	(974)
Changes in debtors and creditors	(80)	895	973
Net cash inflow from operating activities	6,524	7,681	15,903

The Monks Investment Trust PLC

Notes to the condensed financial statements (unaudited)

1.	The condensed financial statements for the six months to 31 October 2014 comprise the statements set out in the previous pages together with the related notes below. They have been prepared on the basis of the same accounting policies as set out in the Company's Annual Report and Financial Statements at 30 April 2014 and in accordance with the ASB's Statement 'Half-Yearly Financial Reports' and have not been audited or reviewed by the Auditors pursuant to the Auditing Practices Board Guidance on 'Review of Interim Financial Information'. The Company's assets, the majority of which are investments in quoted securities which are readily realisable, exceed its liabilities significantly. All borrowings require the prior approval of the Board. The Board approves borrowing and gearing limits and reviews regularly the amounts of any borrowing and gearing as well as compliance with borrowing covenants. Accordingly, the Half-Yearly Financial Report has been prepared on the going concern basis as it is the Directors' opinion that the Company will continue in operational existence for the foreseeable future.
2.	The financial information contained within this Half-Yearly Financial Report does not constitute statutory accounts as defined in sections 434 to 436 of the Companies Act 2006. The financial information for the year ended 30 April 2014 has been extracted from the statutory accounts which have been filed with the Registrar of Companies. The Auditors' Report on those accounts was unqualified and did not contain statements under sections 498 (2) or (3) of the Companies Act 2006.
3.	In order to comply with the Alternative Investment Fund Managers Directive, with effect from 1 July 2014 the Company has terminated its investment management agreement with Baillie Gifford & Co and has appointed Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, as its Alternative Investment Fund Manager and Company Secretary. Baillie Gifford & Co Limited has delegated portfolio management services to Baillie Gifford & Co. The notice periods and management fee are unchanged under these new arrangements. The Management Agreement is terminable on not less than six months' notice.
4.	Net return per ordinary share	Six months to  31 October  2014 £'000	Six months to 31 October  2013 £'000	Year to 30 April 2014 £'000
	Revenue return on ordinary activities after taxation	5,115	4,589	11,181
	Capital return on ordinary activities after taxation	40,114	75,159	28,649
	Total net return	45,229	79,748	39,830
	Net return per ordinary share is based on the above totals of revenue and capital and on 226,115,154 (31 October 2013 - 230,857,673; 30 April 2014 - 229,470,589) ordinary shares, being the weighted average number of ordinary shares in issue during each period. There are no dilutive or potentially dilutive shares in issue.
5.	Dividends	Six months to  31 October 2014 £'000	Six months to 31 October  2013 £'000	Year to 30 April 2014 £'000
	Amounts recognised as distribution in the period:
	Previous year's final dividend of 3.45p (2013 - 3.45p), paid 8 August 2014	7,824	7,911	7,911
	Interim dividend for the year ended 30 April 2014 of 0.50p, paid 31 January 2014	-	-	1,141
		7,824	7,911	9,052

The Monks Investment Trust PLC

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

5.	Dividends (ctd)	Six months to  31 October 2014 £'000	Six months to 31 October  2013 £'000	Year to 30 April 2014 £'000
	Amounts paid and payable in respect of the period:
	Adjustment to previous year's final dividend re shares bought back	(38)	(380)	(380)
	Interim dividend for the year ending 30 April 2015 of 0.50p (2014 - 0.50p)	1,119	1,141	1,141
	Final Dividend (2014 - 3.45p)	-	-	7,862
		1,081	761	8,623
	The interim dividend was declared after the period end date and has therefore not been included as a liability in the balance sheet. It is payable on 30 January 2015 to shareholders on the register at the close of business on 9 January 2015. The ex dividend date is 8 January 2015. The Company operates a Dividend Reinvestment Plan and the final date for elections for reinvestment of this dividend is 16 January 2015.
6.	At 31 October 2014, the Company's borrowings comprised a £40m 6 3/8% debenture stock repayable in 2023. The fair value of borrowings at 31 October 2014 was £44.0m (31 October 2013 - £84.0m; 30 April 2014 - £43.6m).
7.	During the period under review the Company bought back 4,176,000 ordinary shares with a nominal value of £208,000 for a total consideration of £15,905,000.  At 31 October 2014 the Company had the authority to buy back a further 31,642,085 shares.
8.	Transaction costs on purchases amounted to £141,000 (31 October 2013 - £128,000; 30 April 2014 - £388,000) and transaction costs on sales amounted to £105,000 (31 October 2013 - £205,000; 30 April 2014 - £315,000).
9.	Shareholders will be notified on or around 15 December 2014 that the Half-Yearly Financial Report has been published and will be available on the Monks' page of the Managers' website www.monksinvestmenttrust.co.uk ‡
10.	Principal Risks and Uncertainties The principal risks facing the Company relate to the Company's investment activities. These risks are market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. An explanation of these risks and how they are managed is contained in note 21 of the Company's Annual Report and Financial Statements for the year to 30 April 2014. The principal risks and uncertainties have not changed since the publication of the Annual Report and Financial Statements which can be obtained free of charge from Baillie Gifford & Co and is available on the Monks' page of the Managers' website: www.monksinvestmenttrust.co.uk.‡ Other risks facing the Company include the following: regulatory risk (that the loss of investment trust status or a breach of applicable legal and regulatory requirements could have adverse financial consequences and cause reputational damage); operational/financial risk (failure of service providers' accounting systems could lead to inaccurate reporting or financial loss); the risk that the discount can widen; and gearing risk (the use of borrowing can magnify the impact of falling markets). Further information can be found on pages 6 and 7 of the Annual Report and Financial Statements.
11.	None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

‡    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.

2 December 2014

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