Stock Stories brings you closer to the heart of our investment strategy. In these short, videos, Co-lead portfolio manager Julian Bishop discusses some of Brunner’s portfolio holdings and how they contribute to our overall strategic objectives of delivering growing dividends and capital growth for our shareholders by investing in a diversified set of high-quality companies from around the world.
In this short episode of ‘Stock Stories’, Julian discusses an investment decision that was made and is illustrative of the Trust’s strategy: ASML.
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My name is Julian Bishop and I'm co-lead portfolio manager of The Brunner Investment Trust. It's important to remember that all investments come with risk. We aim to provide an all-weather portfolio that seeks to create wealth across market cycles. And to do this, we seek a balance between investment attributes such as quality, value and growth. Predominantly, though, we invest in high quality companies at a fair price and hold them for a long time.
We look all over the world for the best businesses for our portfolio. One place our search has led us to the Netherlands and the small town of Veldhoven, there, one company employs more than 15,000 people, or one third of the town's population. The company's, called ASML, which stands for Advanced Semiconductor Materials Lithography.
ASML has almost certainly been instrumental in creating the electronic device you're using right now. The company makes lithography machines, which use light to expose tiny patterns on silicon wafers. This is a fundamental step in the production of microchips. The foundations of our digital world.
The latest chip in your smartphone can have as many as 20 billion transistors, on and off switches essentially, in a space little more than 1 centimetre squared. As technology advances and the transistors shrink in size to dimensions literally a few atoms across, the process of creating them becomes almost unfathomably complex.
ASML uses light to expose the pattern of the chip on the silicon wafer. Hence the term lithography, which means stone writing. Because of the nanometer scale of the pattern, is far smaller than the wavelength of ordinary light. ASML uses a new form of light with a far shorter wavelength, called extreme ultraviolet, or EUV. Generating EUV light alone is an exercise of extraordinary complexity. The process involves shooting a tiny ball of tin, a 30 millionth of a meter wide through a vacuum at 200 miles an hour, and then striking it twice with a laser, the first time to pulse it up, the second to blast it into a plasma with a temperature many times hotter than the surface of the sun. This process is repeated 50,000 times per second.
This light is then projected onto the silicon via a series of mirrors which are so smooth that if they were expanded to the size of Germany, the largest defect or mountain would be just 1 millimeter tall.
ASML’s latest machine has over 100,000 parts, costs €350 million euros and weighs as much as two Airbus A320s. The semiconductor industry has come to rely on EUV lithography machines. And ASML is the only company on Earth which can make them.
There are no guarantees with any investments. And this stock story should not be seen as a recommendation. Instead, it's illustrative of our philosophy at the Brunner Investment Trust.
Disclaimers: Securities mentioned in this document are for illustrative purposes only and do not constitute a recommendation or solicitation to buy or sell any particular security. These securities will not necessarily be comprised in the portfolio by the time this document is disclosed or at any other subsequent date. Past performance does not predict future returns.