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  3. Rebalancing

Rebalancing

Scheduled Pinned Locked Moved Investments and Portfolios
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  • S Offline
    S Offline
    Slow Horses
    wrote on last edited by
    #1

    Hi team,

    I see on the portal that rebalancing is taking place. Can you share what is changing and in which portfolios etc?

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    • A Offline
      A Offline
      Adam Kay
      Global Moderator
      wrote on last edited by
      #2

      Hi,

      If we exited 100% of an asset within PHT/PHE we would communicated this.
      If we added a new asset to same we would communicate this.
      We do not disclose carrying weights for any portfolios. These may change materially and have.
      We do not disclose any asset holdings(by name/ISIN) or changes to IML

      Regards

      Adam

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      • S Offline
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        Slow Horses
        wrote on last edited by
        #3

        So for PHT/PHE its just adjusting weights which is not disclosed. Got it. Thanks

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        • A Offline
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          Adam Kay
          Global Moderator
          wrote on last edited by
          #4

          If you log-in to your dashboards you will notice a Rebalance Notice. Please take note-Regards

          We will be rebalancing our portfolios on Monday 3rd February. As a result, we will be unable to process any switch or withdrawal requests received after 9am on Friday 31st January until the rebalance has completed. We expect this to be on Monday 10th February. This will affect all active portfolios. Switches and withdrawals from cash will not be impacted and will be processed as usual.

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            Adam Kay
            Global Moderator
            wrote on last edited by
            #5

            We will be Selling two PHT holdings and buying one new holding. Details will follow via forum post and email(to all tech holders).

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              Adam Kay
              Global Moderator
              wrote on last edited by
              #6

              These communications will also be sent to all relevant clients via email once the trades are finalised. This relates to the Tech portfolio.

              The rebalance will include the sale of Paypal and Twilio and a new investment in Micron Technology, Inc (MU). The model portfolio performance to close yesterday, being Paypal +22% and Twilio +107% since acquisition.

              Paypal is a solid business which generates a lot of cash. It trades at a multiple in the mid to late teens however its growth trajectory has slowed due to increased competition and ongoing activist-shareholding involvement has lead us to the conclusion that the capital is better deployed elsewhere.

              Twilio too has had meaningful growth however the stock was stuck in the $50-$60 range from March to Nov 24 range due to management missing or disappointing on their growth plan and guidance. Our active rebalancing, taking weight off at better prices and investing at what we saw as unjustifiably low prices has paid off. From Nov 2024 a reinvigorated business is starting to report better numbers and the stock shot up dramatically to $100 and then, after gaining more support from Wallstreet analysts, $120. In the recent 2 weeks it moved higher still into the $145 range. We think the price is well above its fair valuation due to its ongoing loss making operation and what we consider to be inadequate growth to justify the price move.

              Enter Micron.

              Micron Technology is a major player in the semiconductor industry, offering a wide range of products beyond its High Bandwidth Memory (HBM). Its portfolio includes various types of dynamic random-access memory (DRAM), NAND flash memory, and storage solutions, which are all integral to modern computing, mobile devices, data centres, and other industries. We are investing in Micron due to the material revenue opportunity in HBM-a key component in accelerated compute. Whilst just one of many products they manufacture, it is a needle mover in price, margin and quantity. HBM is a very complex product and there are only two main producers (Samsung is trying to enter but are struggling). Nvidia has pre paid billions for priority access to the product and the company thinks the market(TAM) will reach $100B by 2030.

              Here’s an overview of their other key product lines and their market position:

              Other Main Products

              DRAM (Dynamic Random Access Memory): DRAM is one of Micron’s core products and is used in everything from personal computers and smartphones to high-performance computing systems. It offers high-speed data access and is essential for systems requiring rapid, volatile memory. Micron’s DRAM is known for its performance, reliability, and energy efficiency. The company manufactures different types of DRAM, including LPDDR (Low Power DDR) for mobile devices and server-grade DRAM for data centre applications.
              NAND Flash Memory: NAND flash is another key area for Micron, widely used in storage devices such as solid-state drives (SSDs), mobile devices, and embedded systems. NAND flash provides non-volatile storage, meaning it retains data even when power is lost. Micron produces both consumer-grade and enterprise-grade NAND products, helping drive the adoption of SSDs in everything from laptops to data centre storage solutions.
              Storage Solutions: In addition to NAND flash memory, Micron offers a variety of storage solutions that combine flash memory with proprietary controllers, enhancing performance for enterprise customers. These products are used in data centres, high-performance computing, and other sectors requiring fast, high-capacity storage.
              Automotive Solutions: Micron is expanding into the automotive sector, providing memory and storage solutions for a range of applications, including advanced driver-assistance systems (ADAS), infotainment systems, and autonomous driving technologies. As vehicles become increasingly reliant on smart technology, Micron’s products help power these innovations.
              Industrial and Networking Memory: Micron also manufactures memory products designed for industrial, networking, and edge computing applications. These products are built to endure challenging environments, offering high reliability and performance in mission-critical systems.
              Market Position and Share

              Micron is one of the top players in the global semiconductor market, consistently ranking among the largest memory manufacturers. In the DRAM and NAND flash memory sectors, it is typically in the top three, competing closely with companies like Samsung and SK hynix.

              DRAM Market: As of recent data, Micron holds around 25% of the global DRAM market share, making it the third-largest DRAM manufacturer, behind Samsung (around 40%) and SK hynix (around 30%).
              NAND Flash Memory Market: In the NAND flash memory sector, Micron also holds a significant share, around 20% to 25%, ranking third behind Samsung and Kioxia (formerly Toshiba). This positions Micron as one of the largest NAND flash manufacturers, with a strong presence in both consumer and enterprise storage markets.
              Key Customers

              Micron’s products serve a broad range of industries, and the company has forged relationships with several high-profile customers, particularly in the computing, mobile, automotive, and data centre sectors. Some of their biggest customers include:

              Apple
              Microsoft
              Intel
              Nvidia
              AMD

              We are paying a multiple of approx 15, today, when their main business, supplying consumer electronics markets it at a low point and will rebound. At the same time their HBM memory is just taking off. In the long term we think Micron with thrive in the accelerated computer segment.

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                Ronski
                wrote on last edited by
                #7

                Thanks for the update, nice to see Micron being added, it makes a lot of sense.

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                  Adam Kay
                  Global Moderator
                  wrote on last edited by
                  #8

                  We will be making two changes to the portfolios next week(2 new stocks)-not sure of exact timing. Treat this as aheads up of an impending rebalance across Lifestyle/Tech

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                  The value of your investments can go down as well as up, and you may get back less than you invested.

                  Cobens a trading name of Astute Financial Management UK Limited is authorised and regulated by the Financial Conduct Authority. Registered Address: 4th Floor Peek House, 20 Eastcheap, London, EC3M 1EB. Registered in England and Wales No. 5850981.

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