That, and the disastrous handling of Oasis tickets, made it a far busier late summer than usual!

In the middle of this maelstrom we initiated a new position, little by little, in an old holding, ARM Holdings, who we first bought in the early 2000s. We watched it come and go as the smartphone industry boomed and it was subsequently taken out in mid-2016 by Masayoshi Son’s Softbank Group. There it sat in the world’s largest tech fund, the Vision Fund, where it consolidated its position as one of the leading chip designers before being spun back out, last year, in September 2023. Although it is now US listed (as an ADR), with US management and a huge Silicon Valley ethos, it has retained its Research and Development base in Cambridge, UK, and importantly for UK fund managers it’s UK incorporation and domicile.

Shares tanked in the wake of Nvidia’s share price and we used the opportunity to initiate a position. The two businesses both operate in the cyclical (often forgotten) semiconductor industry but are very separate businesses. AI (and market sentiment) is driving Nvidia into one of the world’s most valuable companies; Arm on the other hand is focused on designing and licensing chips in the smartphone sector (50/50 between Apple and Android OS) as well as in the Internet of Things space. Arm revenue growth is forecast to grow >20% over the next three years and analysts believe that the next peak in the semiconductor market will be around mid-2025. Day to day AI will be driver of this growth as consumers look to purchase new AI smartphones, such as the latest iPhone 16, which Apple anticipate strong demand for. Android too (led by Samsung) are improving their mobile AI capability and will be a significant player in the ramp up of demand. Sales between the two OS are ~50/50. Android more mass-market, lower margin with Apple more exclusive, less sales and higher margin.    

Aside from our latest new initiation we have been busy across the portfolio. We have trimmed (marginally) positions in RELX, Diploma, Unilever and Investor AB all on the back of strong results and share price performance this year. We have used the proceeds to add to Judges Scientific, Diageo and Croda. 
 

The above article has been prepared for investment professionals. Any other readers should note this content does not constitute advice or a solicitation to buy, sell, or hold any investment. We strongly recommend speaking to an investment adviser before taking any action based on the information contained in this article.

Please also note the value of investments and the income you get from them may fall as well as rise, and there is no certainty that you will get back the amount of your original investment. You should also be aware that past performance may not be a reliable guide to future performance.