Amphenol Corp. engages in the design, manufacture, and marketing of electrical, electronic and fiber optic connectors, interconnect systems, antennas, sensors and sensor-based products, and specialty cable. It operates through the following segments: Harsh Environment Solutions, Communications Solutions, and Interconnect and Sensor Systems. The Harsh Environment Solutions segment manufactures and markets a broad range of ruggedized interconnect products, including connectors and interconnect systems, printed circuits and printed circuit assemblies, and other products. The Communications Solutions segment focuses on the design, manufacture, and marketing of connector and interconnect systems, including radio frequency, power, fiber optic, and other products, together with antennas. The Interconnect and Sensor Systems segment is involved in the design, manufacture, and marketing of sensors, sensor-based systems, connectors, and value-add interconnect systems. The company was founded by Schmitt J. Arthur in 1932 and is headquartered in Wallingford, CT.
COMMENTARY
Market Review
Global equity markets were mixed in January as ongoing factor rotations continued to pressure growth-oriented stocks. Economic data across major regions were mixed, and policy developments in the United States contributed to increased volatility late in the month. The Fund’s currency hedge provided a significant benefit during the month, as the US dollar weakened relative to the Australian dollar.
In the United States, manufacturing activity improved meaningfully, with the ISM index returning to expansion territory as new orders strengthened and production trends stabilised. Labour market indicators, however, were softer. Data on job openings and announced layoffs pointed to rising redundancies and subdued hiring momentum, suggesting some cooling beneath the surface. Late in the month, the nomination of Kevin Warsh as the next Federal Reserve chairman added to market volatility, given his previous comments on reducing the size of the Federal Reserve’s balance sheet and keeping interest rates higher for longer.
In Europe, growth indicators showed gradual improvement. German retail sales surprised to the upside, returning to growth after prior weakness, supporting signs of stabilisation in consumer demand. By contrast, Chinese economic data continued to decelerate. Retail sales growth moderated, and both official and private sector surveys across manufacturing and services pointed to contraction or only modest expansion in early 2026.
Overall, global growth remains uneven and regionally divergent. In this environment, Axiom remains focused on companies with accelerating earnings trends and attractive valuations, where improving fundamentals support an attractive medium-term outlook.
Portfolio Commentary
The Fund underperformed the benchmark in January. At the sector level, overweight exposure to industrials contributed positively, supported by both allocation and stock selection. Information technology detracted, primarily driven by weakness in AppLovin. Sector positioning was broadly unchanged, with the largest overweights in information technology and industrials, and the largest non-exclusionary underweights in financials and consumer staples. The Strategy remains underweight software following reductions to Microsoft, ServiceNow, SAP and Oracle in the fourth quarter of 2025.
Siemens Energy, a provider of power generation and grid infrastructure equipment, was the strongest contributor as turbine demand and extended lead times continued to support pricing power and improving margin expectations. Management’s medium-term guidance and consensus forecasts remain conservative relative to through-cycle profitability. ASML, the leading supplier of advanced semiconductor lithography equipment, also performed strongly following record order trends, with both advanced logic and memory markets entering an early capital spending upturn. Alphabet contributed as ongoing fundamental work points to upside in its core Search and YouTube advertising businesses, alongside improving prospects in cloud infrastructure.
AppLovin detracted as broader artificial intelligence concerns spread beyond application software to digital platforms. We believe the reaction underestimates the durability of its gaming-based advertising platform and the incremental opportunity created by its expansion into e-commerce advertising. Early adoption trends remain encouraging. Microsoft also weighed on returns after Azure revenue growth, while strong, fell short of elevated expectations. Underlying demand remains robust, and growth should improve as additional computing capacity comes online.
At the stock level, the largest additions were to Hitachi, Alibaba and Danaher. Hitachi continues to benefit from strong demand for high-voltage transmission equipment, with operating leverage not yet fully reflected in forecasts. Alibaba’s outlook is improving as adoption of its Qwen large language model supports upside in its cloud business. We also added to Danaher, where accelerating trends in diagnostics and balance sheet flexibility support the investment case.
The Fund initiated positions in Epiroc, Heidelberg Cement, Samsung Electronics, Societe Generale and Teradyne, reflecting opportunities across European industrial recovery, the semiconductor memory upcycle, banking turnaround potential and rising semiconductor testing complexity. The Fund exited Deutsche Boerse, Netflix, Oracle and SAP, redeploying capital toward higher-conviction opportunities with stronger earnings momentum.
There were no MSCI ESG rating changes during the month. Engagement activity was limited as focus shifted toward upcoming earnings results and management outlooks for 2026.