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<p><strong>Your capital is at risk. Past performance is not a guide to future returns. </strong></p>
<p> </p>
<p><strong>Malcolm MacColl:</strong> It’s been quite the start to the year for global equity investors. As I record this update, there is war in Iran and the Strait of Hormuz, a narrow chokepoint between the Persian Gulf and the Arabian Sea, has been effectively closed by Iran, bringing significant disruption to global energy markets.</p>
<p>This disruption is symptomatic of one of two major themes in markets over the first quarter.</p>
<p>First, worries about geopolitics, a fragmenting world and access to scarce resources, of which the unfolding energy crisis is only the most recent expression.</p>
<p>The second clear trend in markets was triggered by the release of Claude CodeWork, an agentic coding tool which triggered an abrupt reassessment of what might constitute a long-lasting advantage in software.</p>
<p>In contrast to the scarcity of certain physical resources, intelligence is becoming abundant, and the cost of creating code is collapsing. Against this backdrop, our returns in the first part of the year have lagged global indices, which have also, amidst the uncertainty, fallen from their recent highs.</p>
<p>A theme of physical bottlenecks is clearly visible in the attribution. Those companies benefiting from the three major limiting factors in the build-out of AI infrastructure, memory chips, leading-edge manufacturing capacity for the most advanced AI chips, and power and cooling systems, saw Samsung Electronics, TSMC and Comfort Systems all enjoy strong share price appreciation. Energy and power-related companies also did well.</p>
<p>In contrast, the angst towards businesses seen as having any part of their competitive advantage, even tangentially, rooted in software, saw companies such as AppLovin in digital advertising, ecommerce businesses DoorDash, Shopify, and Sea, Adyen in payments, and CoStar, which provides data for the real estate industry, all suffering share price declines of over 30 percent. We view these drawdowns as overreactions and have been selectively adding to positions.</p>
<p>Amongst this noise, our role is to distinguish clear signals within themes. Perhaps most importantly, we see a broadening of the growth opportunities available to us. Specifically, decades of underinvestment in physical assets, alongside trends towards electrification, the rebuilding of defence capabilities, and reshoring, all point towards an improving outlook for heavier industries.</p>
<p>We see mismatches in some metals and commodity markets, for instance. Copper will be in demand as AI infrastructure and electrification build-outs continue globally, and we have taken new holdings in the American miner Freeport McMoRan and the Peruvian bank Credicorp, both well-placed to benefit from this trend.</p>
<p>Similarly, fossil fuels will continue to be needed at scale for decades. And where restrictions permit, we have added to the US onshore driller EOG and the US gas company EQT, and have also increased clients’ holdings in the Brazilian major Petrobras. These actions were taken prior to the most recent disruptions in the Gulf.</p>
<p>Physical bottlenecks of a different sort exist with the AI revolution too, as the infrastructure build-out continues to become more capital-intensive. We’ve added to Samsung on the strength of its memory business, and also own positions in other specialist machine makers and data centre builders, where the scarcity of their expertise represents other profitable bottlenecks.</p>
<p>If the market remains conflicted about AI, with the narrative oscillating between exuberance and scepticism, this flipping of sentiment has been especially dramatic in software. Such a widespread draining of confidence offers a rich opportunity.</p>
<p>For instance, in contrast to the prevailing mood, the ecommerce platform Shopify and the payment technology platform Adyen should be strengthened by AI agents. Both provide critical support to merchants and a broadening network helps them if an army of empowered sellers relies on them to make transactions happen. Similarly, Samsara combines an operating dashboard with sensors that customers attach to vehicles and equipment. The combination of hardware and software gives Samsara durability.</p>
<p>We’ve added to all three. In contrast, we’ve sold where the pace of change is weakening holdings.</p>
<p>One example of Salesforce, where we expected the company to embed AI to its advantage into its customer relationship software. However, it looks now more likely to be overtaken by advances in other companies.</p>
<p>Overall, our recent actions have done two things for the portfolio.</p>
<p>First, they’ve broadened our sources of growth, moderating previous areas of underexposure. That feels right given the widening range of possible futures and the rising capital intensity of growth across several end markets.</p>
<p>Second, they’ve kept our growth ambitions high. And evening out of our sector and industry positions gives us the freedom to swing for the fences in the right stocks. We’ve adjusted our technology-focused holdings to give us the best chance of owning the most rewarding group of high-growth businesses.</p>
<p>And what I find most exciting right now is that we’ve not had to pay up to make this switch. In relative valuation terms, the portfolio remains around historic lows. The previous times we’ve approached those lows, this has preceded rewarding spells for shareholders, and I’m confident that we’re well-placed to deliver that once again.</p>
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<h3 class="TABLEHEADER1212pt">The Monks Investment Trust plc</h3>
<p class="TABLEHEADER1212pt"><strong>Annual discrete performance to 31 March (%)</strong></p>
<table border="1" style="border-collapse: collapse; width: 100%; border-width: 0px; height: 74.6668px;">
<tbody>
<tr style="height: 18.6667px;">
<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.6667px;"> </td>
<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.6667px; text-align: right;"><strong>2022</strong></td>
<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.6667px; text-align: right;"><strong>2023</strong></td>
<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.6667px; text-align: right;"><strong>2024</strong></td>
<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.6667px; text-align: right;"><strong>2025</strong></td>
<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.6667px; text-align: right;"><strong>2026</strong></td>
</tr>
<tr style="height: 18.6667px;">
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px;">Share Price </td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right;">-17.5</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right;">-12.7</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right;">18.7</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right;">1.4</td>
<td style="border: 1px solid rgb(204, 204, 204); padding-top: 10px; padding-right: 10px; padding-bottom: 10px; height: 18.6667px; text-align: right;">20.9</td>
</tr>
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<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px;">NAV</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right;">-9.4</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right;">-7.8</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right;">20.1</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right;">0.0</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right;">17.5</td>
</tr>
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<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px;">FTSE World Index</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right;">14.9</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right;">-0.7</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right;">22.5</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right;">4.8</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right;">19.4</td>
</tr>
</tbody>
</table>
<p><span class="source-text">Source: Morningstar, FTSE, total return in sterling</span></p>
<p>Past performance is not a guide to future returns. </p>
<p><span class="source-text">Source: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). © LSE Group 2023. FTSE Russell is a trading name of certain of the LSE Group companies. “FTSE®” “Russell®”, “FTSE Russell ®, is/are a trade mark(s) of the relevant LSE Group companies and is/are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication.</span></p>
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<p><strong>Risk factors</strong></p>
<p>This film was produced and approved in April 2026 and has not been updated subsequently. It represents views held at the time and may not reflect current thinking.</p>
<p>This communication does not constitute, and is not subject to the protections afforded to, independent research. Baillie Gifford and its staff may have dealt in the investments concerned. The views expressed are not statements of fact and should not be considered as advice or a recommendation to buy, sell or hold a particular investment.</p>
<p>Baillie Gifford & Co and Baillie Gifford & Co Limited are authorised and regulated by the Financial Conduct Authority (FCA).</p>
<p>The investment trusts managed by Baillie Gifford & Co Limited are listed on the London Stock Exchange and are not authorised or regulated by the FCA. The value of their shares, and any income from them, can fall as well as rise and investors may not get back the amount invested.</p>
<p>All information is sourced from Baillie Gifford & Co and is current unless otherwise stated.</p>
<p>Further details of the risks associated with investing in the Trust, including a Key Information Document and how charges are applied, can be found in the Trust specific pages at <a href="https://protect-eu.mimecast.com/s/S_sVCZzG3I7Y1vmiK6j2K">www.bailliegifford.com</a>, or by calling Baillie Gifford on 0800 917 2112.</p>
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