ASML

What does the company do? ASML is an innovation leader which supplies hardware, software and services to semi-conductor manufacturers. Globally, only one company is capable of keeping us on the course predicted by Gordon Moore in the 1960s, specifically that the processing power of semiconductor chips would double roughly every two years. That company is ASML and, in doing so, it is central to the successful resolution of mankind's key technology challenges over the next decade, from artificial intelligence to machine learning, Internet of Things and autonomous vehicles. Why do we like the investment? As rampant digitisation advances, it is likely the underlying growth for semiconductors will comfortably clear the double-digit compound rates. At the same time, a competitive position that was already quasi-monopolistic is becoming more so as innovation advances, fuelling demand for ASML's most advanced machines. We believe this has material and positive implications for the company's profitability as we progress through the decade, whilst also conferring pricing power and a highly cash-generative model which will continue to fund a generous dividend policy.