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 Commentary
In US dollar terms, equities declined across all major regions except Europe, where returns were supported by strong gains in Dutch semiconductor equipment manufacturer and index heavyweight ASML. Hong Kong equities fell sharply amid concerns about tighter Chinese regulations aimed at limiting capital outflows. However, the weaker Australian dollar more than offset the underlying market decline, resulting in a 3.0% gain for the index over the month.
The AI trade wavered during the month. The hyperscalers – large technology companies operating vast cloud and data centre networks – are pulling back as concerns about the scale of their capital expenditure resurface. By contrast, many of the “picks and shovels” companies supplying the AI buildout, including ASML, continued to perform strongly. The Energy sector was weighed down by lower oil prices, reflecting improved prospects for a US-Iran agreement and expectations that the Strait of Hormuz would reopen.
Portfolio Commentary
The Fund rose 2.1% in June, underperforming the benchmark’s 3.0% gain, with the shortfall largely driven by US technology and communication services holdings. Netflix came under pressure after maintaining, rather than raising, its full-year 2026 revenue guidance, prompting concerns that growth may be slowing, while Meta Platforms declined amid investor concerns about the scale of its AI spending. Offsetting some of this weakness, ASML was the Fund’s strongest performer, benefiting from strong demand for equipment used in AI semiconductor manufacturing.
During the month, we purchased Spotify, the world’s largest music, podcast and audiobook streaming platform, with around 750 million users. Its competitive advantage lies in its recommendation technology, which uses extensive user data to personalise content and improve engagement and retention. We expect future growth to come from new content, including audiobooks and podcasts, as well as tools that help artists connect with audiences and promote their music.
We also exited three holdings: Genmab, due to increasing competition in key areas. Fabrinet, on valuation grounds, and Vertex Pharmaceuticals, due to concerns about its growth outlook.