Trustnet Magazine 64 July 2020 | Page 36

MONKS ANNUAL PAST PERFORMANCE TO 30 JUNE EACH YEAR
[ BAILLIE GIFFORD ]

Companies which are successful over the long term are those that sacrifice short-term profitability to embrace and drive far-reaching structural change

gazing to others . What they do know is that over sustained periods of time ( five years and beyond ), share prices follow the path of earnings . Therefore , the team spends time trying to understand the fundamental opportunities available to companies . That will typically involve looking at whether a business operates in a market with obvious scope for growth , whether that business has a clear competitive advantage , and whether management runs the organisation in a sustainable and thoughtful manner . This approach provides markers in the sand , against which progress may be measured . In the real world , this progress takes time . So the Trust ’ s managers think in decades , rather than trying to second-guess what will happen over quarters .
Risk capital Markets crave certainty . A huge amount of work goes into analysis of the minutiae – what is referred to as being right of the decimal point . But the one sure thing is that life isn ’ t
MONKS ANNUAL PAST PERFORMANCE TO 30 JUNE EACH YEAR
2016 3.2 % 2017 59.9 % 2018 22.1 % 2019 9.5 % 2020 15.3 %
Source : Morningstar , share price , total return .
Past performance is not a guide to future returns .
certain . The success of a business in years to come can never be foretold or guaranteed . With this as a starting point , Monks deliberately embraces uncertainty . The managers realise that companies which are successful over the long term are those that sacrifice short-term profitability to embrace and drive far-reaching structural change . Big societal shifts over the next decade and beyond are far more powerful than next month ’ s
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