Fund of the week: Buy into the new tech boom
Investors burnt by the last tech bubble should take another look at the sector. This internet and mobile-focused trust is already up 20% in the last six months.
Investors who are still wary of technology stocks, long after the dotcom bubble burst in 2000, should give the sector a second chance. "Investors have already begun to make decent returns," notes David Prosser in The Times. The Polar Capital Technology Investment Trust (LSE: PCT), for example, managed by Ben Rogoff, is up by more than 20% in the past six months alone.
That's in part because, in the first three months of the year, the US technology index, the Nasdaq, has returned 19%, buoyed by many technology companies reporting solid 2011 results.
Rogoff's fund focuses on North America and targets three key areas: internet infrastructure, broadband applications and mobile data. "We are in the early stages of a disruptive new technology cycle, which offers the potential for next-generation companies to deliver strong secular [long-term]growth even against a challenging economic backdrop."
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The growth in the use of smart phones and tablets, as well as the rise of social media, is a key driver, says Leonora Walters in Investors Chronicle. What's more, technology firms today are in a very different state to those at the turn of the millennium "they are cash rich with good balance sheets".
With the internet expanding in significant emerging markets, such as China, and larger technology firms trading on low valuations, the current technology boom might well have further to run, particularly as the sector is regaining the attention of the mainstream media.
As Rogoff told Jenny Lowe at FT Adviser, "The Facebook initial public offering was [the latest] opportunity for investors to reconsider the merits of the technology sector." The trust currently trades on a 3.49% discount to its net asset value.
Polar Capital Technologytop ten holdings
Apple | 12.4 |
4.6 | |
Microsoft | 4.4 |
Samsung Electronics | 3.8 |
Qualcomm | 3.1 |
International Business Machines | 2.6 |
Intel | 2.5 |
Cisco Systems | 2.3 |
Oracle | 2.2 |
Taiwan Semicon Manufacturing | 2.1 |
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
Review: The Store, Oxford – purveyors of excellence
MoneyWeek Travel The Store is a luxurious, new hotel in Oxford that has set up shop in a former department store in the heart of the city
By Chris Carter Published
-
Seven ways the Budget could hike inheritance tax or capital gains tax at death
Chancellor Rachel Reeves could target death taxes by raising IHT and/or levying CGT on inheritances. We look at some potential moves in the Autumn Budget
By Ruth Emery Published