Key Takeaways
- Monks Investment Trust owns big-ticket tech stocks among top holdings but has cast its net wider for growth.
- Around half of the portfolio is invested in stocks not tied to the AI theme.
- The investment trust’s manager believes the potential of SpaceX lies with data centers in space rather than Starlink.
Growth investing has become increasingly associated with a small group of US technology giants but the managers of the £2.5bn Monks Investment Trust MNKS think that misses a much broader opportunity.
Monks does count Nvidia NVDA among its top 10 holdings with a nearly 5% weighting, and Alphabet GOOG at just under 4%. It also has significant exposure to the semiconductor industry and has owned a stake in SpaceX SPCX since before the company went public. But elsewhere in the portfolio sit companies as varied as Games Workshop GAW, Japanese pharmaceutical group Chugai 4519 and US firm Samsara IOT, which provides technology for companies operating vehicle fleets and other physical assets.
This range reflects the Baillie Gifford-managed trust’s deliberately broad definition of growth—and the management team’s belief that today’s increasingly concentrated stock markets are not necessarily representative of where the best long-term opportunities lie. “The index is just becoming more risky,” Michael Taylor, a portfolio manager on the Gold-rated trust says. “We’re hoping we have a diverse range of growth drivers, and we don’t think that is reflected in the index at the moment.”
Performance of Monks Investment Trust
The trust has posted a total return of around 8% in the year to date and 14.86% annualized over three years and 3.12% annualized over five years.
The investment trust’s performance is below the returns of the benchmark over these periods: The FTSE World index is around 15% higher in the year to date and 18.82% and 12.52% higher over three and five years on an annualized basis.
In 2026, the trust is in the top third of funds in its category, EAA CE Global Large-Cap Growth Equity, and in the top 20% of funds in this category over three years. Over five years, the trust has beaten just 40% of similar funds in the category.
Monks Investment Trust Top Stock Holdings
Monks’ Investment Strategy
Taylor, who joined the management team in April, and runs it alongside Malcolm MacColl, who has been on the fund since 2015, and Helen Xiong, whose tenure began in 2024.
Monks divides its portfolio between three types of company—rapid growth, growth stalwarts and cyclical growth. Taylor says this allows the trust to combine potentially transformative businesses with companies capable of growing at a more modest pace for longer periods, and businesses whose growth is more cyclical.
“We think growth is how you outperform over the long run,” Taylor says. “But by combining the three different types of growth, you probably end up with a smoother ride.”
Michael Born, analyst at Morningstar, says: “Like other strategies at Baillie Gifford, there is an unashamed focus on growth, but compared with others in the stable, the managers here have a more pragmatic and open-minded approach to growth, with more of an emphasis on valuation.”
Different Avenues for Growth
The team’s focus on different avenues for owning growth comes as global stock market returns have become increasingly concentrated.
This year, that has created opportunities in software, Taylor says. Fears that artificial intelligence could disrupt established business models triggered a sharp selloff in the sector. Taylor agrees some companies face genuine threats but thinks others were unfairly caught up in the move.
One example is Samsara, which fell around 50% from its highs and which Monks subsequently added to its existing holdings. It provides connected hardware and software to businesses operating physical assets, helping customers such as school bus fleets monitor maintenance and optimize routes.
Taylor argues investors saw the data-analysis element of the business and treated it like software companies vulnerable to AI disruption.
“We just don’t think that’s right,” he says.
Growth Without AI
Among holdings with little connection to AI, Taylor points to Games Workshop, the UK company behind the Warhammer franchise, as one example. Its miniature figures have a highly loyal following, while a planned screen adaptation with Amazon offers another potential avenue for growth.
Another is Japanese pharmaceutical company Chugai. Taylor says its research and development operation is unusually productive, highlighting its role in discovering an obesity compound subsequently licensed to Eli Lilly LLY.
Monks has also been adding to Axon AXON—which provides wearable tech to military and police—as well as e-commerce giant Shopify SHOP, and Dutch payments company Adyen ADYEN. With these names, Taylor says the market is underestimating their growth prospects.
Monks favors semiconductor equipment companies including Japan’s Disco 6146 and LaserTec 6920, where Taylor believes technical expertise and strong market positions could make them durable beneficiaries of rising investment in AI infrastructure.
Why Monks Owns SpaceX
At the more speculative end of Monks’ growth spectrum sits SpaceX, which the trust first backed as a private company.
Taylor thinks investors risk misunderstanding SpaceX if they value it primarily by forecasting the future profits of Starlink, its satellite broadband business.
Instead, he focuses on the new industries that could become possible if SpaceX continues reducing the cost of putting material into orbit.
One potential opportunity is data processing in space. Taylor argues the economics could become increasingly attractive as the cost of launching equipment falls and terrestrial data centers require ever greater amounts of electricity.
“What you’re doing is taking a variable cost on Earth in the form of power, because it’s essentially free once you get up there because of the free solar energy you have, and you’re swapping it for a fixed cost in launch,” he says.
If those costs eventually converge, Taylor highlights SpaceX could be in an unusually powerful position.
“If those two cost lines overlap, and it becomes economically viable to have these data centers in space, well, there’s only one company with the potential to get stuff up there at scale, and that is SpaceX.”
There are significant caveats. Taylor describes SpaceX’s valuation as “punchy” and acknowledges governance concerns.
But it also demonstrates why Monks combines different types of growth: a higher-risk investment such as SpaceX can sit alongside businesses with much steadier earnings profiles.
Lessons From Getting it Wrong
Monks’ history demonstrates the risks of its approach. The trust’s share price fell more than 30% when growth stocks sold off in 2022, landing in the bottom 15% of trusts in its category, and Born describes the approach as “consistently volatile.”
One was Harley-Davidson HOG. The investment case rested partly on the motorcycle manufacturer broadening its traditional customer base of predominantly male US baby boomers by expanding internationally and appealing to more female and non-white customers.
Taylor says those efforts were successful, but ultimately underestimated a more powerful structural headwind: Harley-Davidson’s core baby boomer customers were getting older, meaning they rode less and replaced their motorcycles less frequently.
“Appreciating the long-term structural trends and just having them on your side is really, really helpful,” he says.
