Two excellent technology investment trusts to buy now

Tech focused-investment trusts Polar Capital and Allianz remain excellent investments in one of the few sectors growing strongly

A doctor on a video call © Getty Images/iStockphoto
Telemedicine is a new subsector
(Image credit: A doctor on a video call © Getty Images/iStockphoto)

Despite dire warnings of imminent collapse from the investment Jeremiahs early this year, the technology sector has been a star performer. In the first half of 2020 the 28% return from the £2.6bn Polar Capital Technology Trust (LSE: PCT) and the 37% from the £800m Allianz Technology Trust (LSE: ATT) helped cushion investors from the market turbulence. So why did the bears get it so wrong?

Ben Rogoff, manager of PCT, says that the tech sector, with earnings growth of around 150%, has driven all the earnings growth of world markets since 2009. As for the pandemic, he agrees with Satya Nadella, CEO of Microsoft, who says: “We’ve seen two years of digital transformation in two months.” The sector’s valuation, with a forward price/earnings multiple of 23.5, may look expensive but is not much above the market average despite its higher earnings growth.

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Max King
Investment Writer

Max has an Economics degree from the University of Cambridge and is a chartered accountant. He worked at Investec Asset Management for 12 years, managing multi-asset funds investing in internally and externally managed funds, including investment trusts. This included a fund of investment trusts which grew to £120m+. Max has managed ten investment trusts (winning many awards) and sat on the boards of three trusts – two directorships are still active.

After 39 years in financial services, including 30 as a professional fund manager, Max took semi-retirement in 2017. Max has been a MoneyWeek columnist since 2016 writing about investment funds and more generally on markets online, plus occasional opinion pieces. He also writes for the Investment Trust Handbook each year and has contributed to The Daily Telegraph and other publications. See here for details of current investments held by Max.