Monks investment trust drastically cuts exposure to cyclicals amid 'stretched valuations'

Weighting drops to over 26% of portfolio

Monks investment trust has continued slashing its weighting to cyclical growth stocks on valuation grounds over the past 24 months, co-manager Malcolm MacColl has revealed.

The move began as far back as October 2015, at which time the trust had almost a third, or 31.1%, invested in companies in this basket. By October 2017, the trust had reduced its weighting by around 15%, to 26.3% of the portfolio. However, over the past 24 months that has accelerated significantly. As at 30 September 2019, Monks had just 17% in this bucket - 45% less than four years ago and 35% less than two years ago. Monks describes the companies in its cyclical growth bucket as those "subject to macroeconomic and capital cycles with significant structural growth prospects" and "...