US retail giant Amazon and Chinese online marketplace Alibaba were among the star performers for the £1.7 billion Monks Investment Trust as the Baillie Gifford-run fund trounced its benchmark during the year to April.

NVIDIA, the US company which designs graphics processing units for the likes of the gaming market, was another significant contributor as Edinburgh-based Monks posted a 15.8 per cent total return on net asset value for the 12 months to April 30.

Its benchmark, the FTSE World Index (in sterling terms), recorded a total return of 7.5%.

Monks highlighted the contribution of its diverse investments in the global semiconductor industry. These investments also include Taiwanese semiconductor manufacturing giant TSMC.

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Monks’ managers, Charles Plowden, Spencer Adair and Malcolm MacColl, say in their report on the accounts: “Growth in data and the digital world, and especially in cloud and mobile applications, has clearly benefited our investments in the semiconductor industry where we own chip designers NVIDIA, Infineon, Rohm and Advanced Micro Devices, manufacturers Samsung Electronics and TSMC, and the makers of testing equipment, Advantest and Teradyne. These companies are all benefiting from very strong volume demand, together with improved pricing power as a result of historic industry consolidation.”

However, they add: “We are wary that in this cyclical industry such boom conditions may not last forever, especially with the Chinese investing heavily to build up their own capabilities and we have begun to bank some profits.”

North American companies accounted for 44.7% of Monks’ total assets at April 30. This was down from 47.1% a year earlier. Monks had significant exposure to Continental Europe, which made up 17% of total assets. Investments in UK companies comprised only 5.3% of Monks’ total assets at April 30, down from 6.3% a year earlier. The trust’s exposure to Japanese companies increased from 6.3% to 8.5% of total assets during the year to April.

Emerging markets investments accounted for 19.4% of total assets at April 30, up from 18.9% a year earlier.

Declaring China is “successfully switching its economic focus from low-cost manufacturing to consumption and services”, Monks’ managers cite the contribution of online company Autohome and classified advertising website as well as Alibaba.

The managers declare: “The (Chinese) government is actively promoting the development of domestic technology champions. Chinese consumer internet companies Alibaba, Autohome and all find themselves at the confluence of these positive developments. All performed strongly and counted amongst the leading contributors to performance for the year.”

Monks’ managers note online retail giant Amazon was the single-largest contributor to the trust’s returns for the year, and since March 2015.

They observe Amazon increased its reported earnings by 26% in 2017, adding: “This rate was depressed, as is usual with this company, by its willingness to invest heavily in order to maximise future growth.”

American online food ordering and delivery company GrubHub was another significant contributor to Monks’ overall performance in the year to April.

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Monks’ managers declare GrubHub now has access to more than 80,000 restaurants in the US, and is four times larger than the next-biggest online food-delivery platform.

The managers note that, during the year to April, the share prices of 14 of the trust's holdings rose by more than 50% in sterling terms.

They say: “Of these, we would categorise 11 as ‘online platforms’. Often these companies are using the internet to deliver traditional services in a way that disrupts incumbents, just as Amazon has done in retail.

“These companies tend to have a number of common features: large market opportunities, asset-light business models, visionary leaders and the enticing possibility of entrenched leadership positions.”

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The managers add: “When one sees a winning ‘online platform’ emerge, it seems simple but the competitive environment is intense; Warren Buffett said recently of Amazon’s doughty leader ‘I think what Jeff Bezos has done is something close to a miracle’.”

Monks is recommending a single final dividend of 1.4p-a-share. It highlighted the fact that its priority was capital growth.