The relative performance of specialist investment management company Polar Capital Technology Trust fell slightly short of the benchmark with the net asset value per share falling 5.6 per cent in the six months to October 31st 2012.
In the FTSE 250-listed company's half yearly results, published on Monday morning, a number of factors were outlined as underlying reasons for the modest shortfall.
Ben Rogoff, investment manager at Polar Capital Technology Trust, commented: "The performance of small-caps was not the primary cause of this modest shortfall as they fell broadly in-line with large-caps over the period, as measured by the Russell 1000 and 2000 technology indices respectively. Instead, the portfolio was negatively impacted by its underweight position in Apple -which outperformed during the period-, poor returns from communication stocks due to continued weakness in service provider capital spending while semiconductor stocks bore the brunt of weaker economic trends and a contracting PC market."
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In terms of positives, relative performance was generated by underweight PC exposure, the decision to retain some liquidity ahead of third quarter earnings season and a number of strong individual stock performances including Ariba, Kenexa, Springsoft and OPNET, all of which were acquired during the period for premiums that ranged between 19-42%.
Rogoff added that the market outlook for economic recovery remained fragile. "While we acknowledge that there may be some additional downside risk to 2013 estimates, we believe this is likely to be modest and strongly disagree with the view that the current earnings cycle may have played out. In our experience, the third quarter has always been an awkward seasonal period -especially for technology earnings- even without the added distraction of the Olympics and leadership change in three of the world's most important economies."
Polar Capital Technology Trust has a market capitalisation of £470.82m
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