Fund of the week: A unique insight into mobile tech stocks

Over the past three years, one of the top-performing technology funds has been the RCM Technology Trust fund (LSE: RTT). It has beaten its benchmark, growing by 62.7% over the past three years, compared with 53.6% for the sector average. It has also beaten the Dow Jones World Technology Index.

The fund is managed by Allianz Global Investors, with experienced manager Walter Price running it from his San Francisco office. This proximity to Silicon Valley enables Price to meet with firms around three times a week, allowing him to gain a "unique insight" into the industry.

His preference is for technology stocks with fast-growing revenues. But while he will tolerate high price/earnings ratios, he insists that a firm must at least be close to turning a profit.After creating a shortlist of around 100 shares, he works with his analysts to find those that offer the most potential.

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up for MoneyWeek’s free twice-daily newsletter.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Sign up

Instead of companies selling expensive software, they are reinventing themselves as service providers, renting out cloud-based' software on a monthly basis. While this will ultimately bring in more money, it will make short-term cash flow more volatile.

In line with these views, about 20% of the fund is in shares directly related to the mobile internet, such as search engine giant Google, internet radio station Pandora and mobile network specialist Aruba. Cloud computing firms, like Amazon, account for another 20%. He also invests in firms that aim to solve a specific problem, such as electric car firm Tesla.