The Company’s investment objective is to seek to achieve long-term capital growth with some potential for income.
Investment Manager’s Commentary
Your Fund returned +3.5% during the month compared to +1.9% for the MSCI World Index NR (£).
Alphabet continues to defy a common expectation that its growth will naturally slow as digital advertising matures. In our view this assumption stems from a misconception that digital advertising is always a substitute for traditional forms of ads for TV, radio and print media. This line of thinking is increasingly challenged by Google’s accelerating volume growth, despite already having over $100bn in annual advertising revenue. In the latest quarter, paying traffic on Google’s own properties (led by mobile search and YouTube) grew +66% and its revenues grew at +20% or more for the 13th quarter in a row. Google’s incredible growth at such scale only makes sense if digital advertising, particularly search, is conceived in far broader terms. Google’s search engine gives retailers of all sizes visibility on the web, much in the same way as a shopping centre hosts retailers in return for rent, and retailers give manufacturers physical shelf-space in return for volume-related discounts (a form of marketing called ‘trade spend’). Mobile phones allow users to shop wherever they are, around the clock, and in marketplaces for both goods and services. These markets for advertising, retail real estate and marketing mean that Google’s core properties participate in global industries that are collectively valued in the trillions rather than billions. This is to say nothing of Alphabet’s more recent efforts to apply advanced computer science to other huge industries, notably enterprise computing, autonomous vehicles and healthcare. The combination of these businesses give Alphabet the opportunity to grow at high rates for many years to come.
Total Gross Assets: £94,365,626 (As at 28.02.19)
NAV Frequency: Daily
Legal Status: Open Ended Investment Company
IMA Sector: Global
Dividends: February and August
Investment Manager: Troy Asset Management Limited
Authorised Corporate Director: Carvetian Capital Management Limited