Softback surprised the market when it announced the purchase of chip design specialist ARM Holdings for $32 billion this summer. That’s just the opening gambit in a long game for the Japanese telecom investor, said Benjamin Beneche, portfolio manager for the ASTON/Pictet International Fund. “It’s a really meaningful long-term acquisition because it opens Softbank up to the ‘internet of things’,” said Beneche. “It’s a brilliant business.” The takeover of ARM gives Softbank a company whose semiconductor know-how is used in 95% of feature and smartphones globally and increased clout to compete in the growing market for connected devices. The purchase marked a dramatic departure from SoftBank’s recent asset-sale drive, which has included a June deal worth $7.3 billion to sell its majority stake in Finnish games maker Supercell to Tencent and co-investors and the sale of $8.9 billion worth of Alibaba BABA securities, bringing down its holding to about 28%. The ASTON/Pictet International Fund is up 4.6% thus far in 2016, according to Morningstar. The $1 billion fund has returned 5.2% in the past 12 months, outpacing 88% of its rivals in Morningstar’s foreign large blend category. Royal Dutch Shell is another one of Beneche’s best bets. Shares of the energy giant are up 10% thus far in 2016, helped along by the rise in natural gas prices. Royal Dutch Shell became the leading natural gas producer when it completed its $53 billion acquisition of BG Group earlier this year. “This BG deal was entirely transformational for their business,” said Beneche. “It made their business more stable with growth in the future and we feel it helps sustain their dividend.” Beneche is also bullish on GlaxoSmithKline , which has seen its shares rise 7% year-to-date. Beneche said the drug giant’s shift to consumer-based products and vaccines helps insulate it from the drug pricing debate hurting pharmaceutical stocks in the U.S. Finally, Beneche is positive on ASML , up 15% year-to-date, saying the semiconductor equipment-maker will not be hurt by the Samsung phone fire fiasco. Last week Samsung announced it is selling about 6.3 million shares in ASML for about $681 million. Samsung said in an August regulatory filing it owned a 2.9% stake, or 12.6 million shares, in ASML. “Samsung is an important client but ASML has exposure to the whole value chain,” said Beneche.
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