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: Visa.
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I'm Julian Bishop, 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 through market cycles. And to do this, we seek a balance between investment attributes such as quality, value and growth. Predominantly, we invest in high quality companies at a fair price on hold them for the long term.
Some - like Visa - are household names. There are billions of Visa debit and credit cards in use around the world and whilst the brand might be familiar, the business model on which it's built its success is perhaps less well known.
As one of the world's leading digital payments networks, Visa takes a very small cut whenever its cards are used at of the millions of merchants that accept them. These minuscule fees are multiplied hundreds of billions of times over. The combination of vast numbers of cards in circulation, issued by thousands of financial institutions and accepted at millions of points of sale, creates a formidable network effect that acts as a very powerful barrier to competition. And importantly, unlike most other financial institutions, they don't carry credits or interest rate risk.
Powerful structural trends have underpinned growing sales and impressive margins. As it appears that we are transitioning to a cashless society and the number of contactless payments soar. Visa is converting $18 trillion in consumer spending, from cash and cheques to digital payments and enhancing financial inclusion.
In many ways Visa has been a perfect investment for The Brunner Investment Trust. It's a company which is demonstrating competitive resilience and has a history of delivering consistent growth in revenues and profitability over many years. We can't predict the future, and we're not making an investment recommendation. But our belief in Visa's business model and outlook have made this a core holding for Brunner, and our all-weather portfolio.
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.