Investment Portfolio

Top Twenty Holdings

1

1 Microsoft

Sector: Software
Country: United States
Value of holding: £109,646,000
% of portfolio: 8.5

Microsoft has emerged as one of the dominant forces in artificial intelligence ('AI') in 2023, forging a tie-up with Chat GPT group Open AI, and developing AI-based service Copilot. Its cloud computing business has also gone from strength to strength. Its deal to buy gaming group Activision Blizzard finally completed in 2023, having also bought fibre optic cable maker Lumenisity in late 2022.

Top Twenty Holdings

2

2 NVIDIA

Sector: Semiconductors &
Semiconductor Equipment
Country: United States
Value of holding: £92,982,000
% of portfolio: 7.2

Nvidia designs graphics processing units ('GPU's). It built its name in the gaming industry, but its real strength is now in AI. Generative AI requires vast processing power that is now largely provided by Nvidia’s sophisticated GPUs. As yet, it has few rivals and has a head start on innovation in this part of the market. Its GPUs are also used in a variety of other industries, including architecture, engineering and scientific research.

Top Twenty Holdings

3

3 Apple

Sector: Technology Hardware, Storage
& Peripherals
Country: United States
Value of holding: £81,921,000
% of portfolio: 6.4

2023 was a tougher year for the smartphone group, but it remained the only major handset maker to deliver annual unit growth during the year, and it finally surpassed Samsung to be the world’s top smartphone maker by volume. It remains the most valuable company in the world even if it has not been able to match the $3 trillion valuation it hit in 2022. Its higher margin services business, which includes its iCloud and Apple Music segments, has continued to be strong.

Top Twenty Holdings

4

4 Alphabet

Sector: Interactive Media & Services
Country: United States
Value of holding: £63,727,000
% of portfolio: 5.0

Alphabet is best-known as the parent company of Google, the world’s leading search engine. However, it also owns YouTube, AI research lab Deep Mind, travel app Waze, ad management group DoubleClick, smart home devices group Nest and fitness tracker group Fitbit. The group is also a major provider of cloud services, though remains behind Amazon and Microsoft. It is making significant investments in AI that should help its search engine and YouTube business segments.

Top Twenty Holdings

5

5 Meta Platforms

Sector: Interactive Media & Services
Country: United States
Value of holding: £53,809,000
% of portfolio: 4.2

Having rebranded Facebook as Meta Platforms in 2021, signalling its ambitions in the metaverse, more recently the group has been using its deep pockets to develop its AI proposition. It told investors AI would take up a significant portion of its $94 billion to $99 billion annual expenditure in the year ahead. Investors have greeted this more warmly than its foray into the metaverse. The group also owns powerful brands, such as Facebook, Instagram and WhatsApp.

Top Twenty Holdings

6

6 Broadcom

Sector: Semiconductors &
Semiconductor Equipment
Country: United States
Value of holding: £46,208,000
% of portfolio: 3.6

Broadcom designs and develops a wide range of semiconductor and infrastructure software products. Its chips are used in a wide variety of markets, including data centres, networking, software, broadband, wireless, and storage and industrial markets. Its $61 billion takeover bid for cloud-computing company VMware finally completed in November 2023.

Top Twenty Holdings

7

7 Amazon.com

Sector: Broadline Retail
Country: United States
Value of holding: £45,310,000
% of portfolio: 3.5

Amazon.com has created a retail revolution since its launch in Jeff Bezos’s garage in 1994, but in 2023 the focus was on the growth in its cloud computing division, Amazon Web Services. This gives it a foothold in the nascent AI market, likely to be important in the years ahead. The group had over-invested during the pandemic, but now appears to have regulated itself and growth returned to its ecommerce division in 2023. It remains the leading ecommerce site across the globe, in spite of a number of challengers.

Top Twenty Holdings

8

8 Lam Research

Sector: Semiconductors &
Semiconductor Equipment
Country: United States
Value of holding: £40,721,000
% of portfolio: 3.2

Lam Research Corporation is an American supplier of wafer-fabrication equipment and related services to the semiconductor industry. It remains an important part of semiconductor supply chain, with its products used primarily in front-end wafer processing. Its products provide the link between design and manufacturing for the latest electronic devices.

Top Twenty Holdings

9

9 Monolithic Power Systems

Sector: Semiconductors &
Semiconductor Equipment
Country: United States
Value of holding: £39,131,000
% of portfolio: 3.0

Monolithic Power Systems creates small, semiconductor-based power solutions for systems found in industrial applications. Its specialist semiconductors are designed to be energy efficient, cost-effective and environmentally responsible. This is becoming increasingly important at a time when there are concerns about the energy use associated with technology developments such as AI. The group was founded in 1997 by current CEO Michael Hsing.

Top Twenty Holdings

10

10 Micron Technology

Sector: Semiconductors &
Semiconductor Equipment
Country: United States
Value of holding: £34,757,000
% of portfolio: 2.7

Idaho-based Micron is the largest US maker of memory semiconductors. It produces a range of semiconductor devices, including dynamic random access memory, flash memory, and solid-state drives. Its consumer products are marketed under the brands Crucial Technology and Lexar. Increasingly, data centre demand is compensating for weakness in its personal computer and smartphones business.

Top Twenty Holdings

11

11 MongoDB

Sector: IT Services
Country: United States
Value of holding: £34,468,000
% of portfolio: 2.7

MongoDB is a database software company founded in 2009 as 10gen. It listed on Nasdaq in 2017. It allows companies to interrogate data at a more granular level. It posted earnings ahead of expectations in 2023, fuelled by demand from the growth of generative AI. The company still isn’t profitable, but it continues to generate revenue growth of 30-40% per year.

Top Twenty Holdings

12

12 Zscaler

Sector: Software
Country: United States
Value of holding: £32,664,000
% of portfolio: 2.5

Zscaler is a global cloud-based information security company, founded in 2008 by serial entrepreneur Jay Chaudhry. It provides a cloud-based information security platform and has the world’s largest security cloud. It also provides next generation firewalls, sandboxing, SSL inspection, antivirus and vulnerability management and is geared into growth sectors such as cloud computing, mobile and Internet of Things environments.

Top Twenty Holdings

13

13 Adobe

Sector: Software
Country: United States
Value of holding: £31,918,000
% of portfolio: 2.5

Computer software and document management group Adobe creates software for the creation and publication of various types of content, including graphics, photography, and print. Alongside its flagship products Adobe Photoshop and Adobe Acrobat, it has also expanded into customer relationship management software. Having tried to buy software design start-up Figma, the two firms announced they were abandoning the merger in December 2023. Nevertheless, the group has been growing its AI offering.

Top Twenty Holdings

14

14 Samsung Electronics

Sector: Technology Hardware, Storage
& Peripherals
Country: South Korea
Value of holding: £31,855,000
% of portfolio: 2.5

Until the end of 2023, South Korea-based Samsung Electronics had been the world’s largest manufacturer of mobile phones and smartphones since 2011, known for its popular Samsung Galaxy brand. It has now been overtaken by Apple, but has a number of other business lines, including lithium-ion batteries and semiconductors. It is also the world's largest memory semiconductor manufacturer.

Top Twenty Holdings

15

15 ServiceNow

Sector: Software
Country: United States
Value of holding: £31,697,000
% of portfolio: 2.5

Founded in 2003 by Fred Luddy, ServiceNow has a cloud computing platform to help companies manage digital workflows. It announced a tie-up with Nvidia in May 2023 to bring AI services to major corporations. ServiceNow is a platform-as-a-service, offering the infrastructure for enterprise and technical management support systems, such as IT service management and help desks.

Top Twenty Holdings

16

16 Advanced Micro Devices

Sector: Semiconductors & Semiconductor Equipment
Country: United States
Value of holding: £31,409,000
% of portfolio: 2.4

Advanced Micro Devices is an American semiconductor manufacturer based in Santa Clara, California. It develops chips for a range of business and consumer markets. In 2023, it launched a chip that it says could break Nvidia’s dominance of the AI market, with chief executive Lisa Su saying the group’s chips could be faster than those of its rivals. Her claim will be tested in 2024 as MI300 chips hit the market.

Top Twenty Holdings

17

17 Datadog

Sector: Software
Country: United States
Value of holding: £30,956,000
% of portfolio: 2.4

Datadog is a cloud software group, providing monitoring of servers, databases, tools and services through its data analytics platform. The group was founded in 2010 by Olivier Pomel and Alexis Lê-Quôc, ultimately floating on the Nasdaq in 2019. The group has benefited from broader adoption of cloud computing and its products are now compatible with all the major web services providers – Amazon, Microsoft, Google and others.

Top Twenty Holdings

18

18 CrowdStrike

Sector: Software
Country: United States
Value of holding: £30,103,000
% of portfolio: 2.3

Security group CrowdStrike uses artificial intelligence (AI) to give real-time protection and visibility for companies, preventing attacks. The group draws data from across the globe, giving it one of the most advanced data platforms for security. This should help identify and prevent breaches before they occur.

Top Twenty Holdings

19

19 Shopify

Sector: IT Services
Country: United States
Value of holding: £26,944,000
% of portfolio: 2.1

Shopify is a Canadian multinational e-commerce company headquartered in Ottawa. Its proprietary ecommerce platform allows merchants to launch online stores. The platform will handle marketing and payments, plus secure transactions and shipping. It now has 1.75m merchants using its platform. The platform is cloud-based and hosted, which means merchants don’t need to maintain servers or worry about upgrades.

Top Twenty Holdings

20

20 Mercadolibre

Sector: Broadline Retail
Country: United States
Value of holding: £26,109,000
% of portfolio: 2.0

Argentine ecommerce company Mercadolibre operates online marketplaces for e-commerce and online auctions. The company has operations across all the major markets in South America, including Brazil, Chile, Colombia, Costa Rica, Mexico, Peru, Uruguay and Venezuela. Time Magazine listed Mercadolibre as one of its 100 most influential companies in the world for 2023.

Portfolio Analysis

at 31 December 2023

Geographical breakdown

As cash is excluded and the weightings for each country are rounded to the nearest tenth of a percent, the aggregate weights may not equal 100%.

Sector breakdown

As cash is excluded and the weightings for each sector are rounded to the nearest tenth of a percent, the aggregate weights may not equal 100%.

Investment Portfolio

at 31 December 2023