The Monks Investment Trust has almost halved its fixed interest weighting over the last year as mana...
The Monks Investment Trust has almost halved its fixed interest weighting over the last year as manager Richard Burns switched back into equities.
Since April 2002 the £607m portfolio, managed by Baillie Gifford, reduced its bond exposure from 16.5% to 8.4% a year later.
While Burns remains far from bullish on equities, he felt that last year the asset class was beginning to show decent value and levels of income at a time when low rates meant bonds were becoming less attractive.
Some £95m was raised by gilt sales and of that figure, £20.6m was used to finance buybacks and £60.7m was invested in equities.
Burns said geographically, additions were made to all areas but chiefly to Europe at £18.8m, North America at £15.8m and £11.5m in Japan. In terms of sectors, weightings to healthcare and pharmaceuticals, telecommunications and non-life assurance were increased with further exposure to companies such as Pfizer, GlaxoSmithKline and Vodafone.
In the 12 months to April 2003 the trust's NAV underperformed the FTSE World Index in sterling terms. The portfolio fell by 24.4% against a 23.3% decline in the benchmark.
Burns said: 'Good UK equity stock selection was offset by a poorer overseas performance. The negative effect of gearing was counterbalanced by the positive contribution from the fixed interest holdings in the period.'
Over the 12 months to 2 June, shares in Monks returned -24.2%, mid to mid, against a sector average of -20.4%.
Over the period it is ranked 22 out of 34 in the Global Growth sector according to Standard & Poor's.
In the three years to 2 June it had a return of -25.2% against an average of -26.4%. Over three months it has a positive return of 12.9% to be ranked 18 out of 34.
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