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."
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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 |
