New for 2017. Ploughing a different furrow brings success
Under its new manager, Charles Plowden, who took over the running of the trust in March 2015, the performance of Monks has shot forward. Plowden abandoned the cautious approach that had previously been adopted and started increasing the trust's borrowing in order to take advantage of opportunities.
Its gearing currently stands at 7 per cent. Plowden believes a company's share price ultimately follows its earnings. He therefore looks to invest in companies that offer the prospect of sustainable above-average growth. He also takes a long-term approach, expecting to hold stocks for around five years on average.
Plowden recognises that companies grow at different rates, some more cyclically than others, so he is also prepared to invest in companies with latent growth opportunities. He think the trust's long-term investment perspective allows it to capture the more volatile growth from companies in a range of industries that other growth investors may overlook.
He places all the stocks in the trust in one of four 'growth categories' - stalwart, rapid, cyclical and latent - in order to create a differentiated and diversified portfolio.
While Plowden's focus is on picking individual stocks, there are three broad areas of exposure about which he is currently enthusiastic. The first is increasing Asian consumption from a growing middle class, providing opportunities for companies in China and beyond to grow strongly.
Second is the continued underlying growth of the US economy. The third area of exposure is related to companies that use technology and innovation to disrupt existing traditional business models.