Interim Management Statement

RNS Number : 7158M

Monks Investment Trust PLC

19 August 2011

 



THE MONKS INVESTMENT TRUST PLC

Interim Management Statement - 3 months to 31 July 2011

Monks' objective is to invest internationally to achieve capital growth, which takes priority over income and dividends.  Monks' policy is to invest principally in a portfolio of international quoted equities. The Company is prepared to move freely between different markets as opportunities arise. Asset classes other than equities may be purchased from time to time including fixed interest holdings, unquoted securities and derivatives. The equity portfolio may be relatively concentrated for a global fund.

Review of the Period

·	Over the period, the Company's net asset value (NAV) decreased by 3.1% compared to a fall in the FTSE World Index of 3.8%, while the share price decreased by 5.8%. All figures are total return (capital and income).
·	In July 2011, FTSE 100, S&P500 and Euro Stoxx 50 index futures were sold to help protect assets against any significant fall in market values. At the same time out-of-the-money call options on these indices were purchased with expiry dates in 2012.  The sales of futures augment existing such positions and the out-of-the-money call options provide an element of cover should markets rise significantly.  These transactions, combined with existing positions, take effective gearing at 31 July 2011 to 92% of shareholders' funds after deducting borrowings at fair value (30 April 2011 - 111%).
·	An addition was made to the holding in Vale and there were also part sales of Aggreko, OGX, Petrofac and Healthspring, with the latter three dropping out of the Top 10 as a result. The other changes to the Top 10 constituents were due to market movements.
·	At the Annual General Meeting held on 2 August 2011 all resolutions were passed, including the approval of a final dividend of 2.50p per share which was paid to shareholders on 5 August 2011.

Total Return Performance

	%
	3 Months	1 Year	3 Years	5 Years
Share Price	(5.8)	18.2	5.0	40.4
NAV (fair)	(3.1)	15.0	10.9	39.7
Comparative Index	(3.8)	13.5	27.4	32.5

Source: Morningstar/Thomson Reuters Datastream; Comparative Index is FTSE World Index (sterling terms).

Geographical Distribution of Total Assets*				Geographical Exposure of Total Assets†
Region	31/07/11 %	30/04/11 %		Region	31/07/11 %	30/04/11 %
United Kingdom	17.8	16.6		United Kingdom	11.0	13.5
Continental Europe	14.8	16.3		Continental Europe	7.8	13.1
North America	17.2	17.4		North America	10.3	14.5
Japan	4.5	5.3		Japan	15.8	13.4
Asia Pacific	17.0	16.8		Asia Pacific	20.5	17.2
Other Emerging Markets	16.2	17.7		Other Emerging Markets	19.5	18.2
Bonds	8.0	7.7		Bonds	9.7	7.8
Net liquid assets	4.5	2.2		Net liquid assets	5.4	2.3
Total	100.0	100.0		Total	100.0	100.0

*The distribution table above reflects the market values of the Company's holdings.

†The exposure table above adjusts the market values to take into account the exposures of derivative holdings which may differ substantially from their market value. The Company's main derivatives holdings are sales of index futures and purchases of index call options.

Past performance is not a guide to future performance

Top Ten Equity Holdings
Name	% of total assets at 31/07/11	% of total assets at 30/04/11
Seadrill	2.8	2.7
Aggreko	2.4	2.5
Cetip	1.7	1.6
Odontoprev	1.7	1.5
Vale	1.5	1.7
National Oilwell Varco	1.4	1.3
Eldorado Gold	1.4	1.4
Novozymes	1.3	1.3
Dragon Oil	1.3	1.3
Drax Group	1.2	1.0
Total	16.7	16.3

General Information
	31/07/11	30/04/11
Share Price	340.5p	364.0p
Total assets (before deduction of  borrowings)*	£1,183.2m	£1,220.5m
Total borrowings (at fair value)	£168.4m	£167.2m
Net asset value per share (after deducting borrowings at fair value)*	389.2p	403.9p
Discount (borrowings at fair value)	12.5%	9.9%
Potential gearing (borrowings at fair value)	16.6%	15.9%
Gearing less cash (borrowings at fair value)	11.0%	14.1%
Effective gearing (taking into account sales of equity index futures and purchase of equity index call options, borrowings at fair)	-8.3%	10.8%
Total borrowings (at par)	£160.0m	£160.0m
Net asset value per share (after deducting borrowings at par)*	392.4p	406.7p
Discount (borrowings at par)	13.2%	10.5%
Potential gearing (borrowings at par)	15.6%	15.1%
Gearing less cash (borrowings at par)	10.1%	13.3%
Effective gearing (taking into account sales of equity index futures and purchase of equity index call options, borrowings at par)	-9.3%	10.0%

*These figures have been calculated using the AIC cum income basis (includes current financial year retained income).

This interim management statement and up to date NAV and share price information are available on the Managers' website 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.

Baillie Gifford & Co

Company Secretaries

19 August 2011

For further information contact:-  Robert O'Riordan on 0131 275 3181

 

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