Investment trust insider on Asian technology – James Carthew: there’s a lot of Asia tech we’re missing
I met Mark Sheppard, the fund manager and leading shareholder of Manchester & London (MNL), last week. He was adamant that it was madness that most UK investors’ portfolios were very underweight US technology stocks and had next to no exposure to Asian technology, whose rapid growth I have commented on several times.
In November 2016, I wrote about this in connection with Pacific Horizon (PHI). Back then, I was suggesting that globally listed tech stock valuations might be too pessimistic. I mentioned Pacific Horizon, Allianz Technology (ATT), Polar Capital Technology (PCT), Herald (HRI) and Scottish Mortgage (SMT) as potential ways to play the sector. If only I had put more of my money where my mouth was! Each of those trusts features in the list of the 25 best-performing stocks for growth in net asset value (NAV) over the past year.
The question many people are asking is: how long can technology continue to outperform? I think that it might be true that individual stocks are expensive but new companies are being created continually that will grow to become the industry giants of tomorrow.
Technology companies, especially cloud-based technology companies, can sell their product and base their operations anywhere (politics permitting). There is innovation everywhere – Augmentum Fintech (AUGM) would tell you that the UK and Germany appear to be world leaders in its sector, and Herald’s portfolio includes exciting companies like UK-based ITM Power, which is developing hydrogen energy solutions. In this new world, small companies can scale rapidly and do not necessarily need deep-pocketed venture capitalists behind them.
Ewan Markson-Brown, co-manager of Pacific Horizon, thinks that, as we embark on a new cycle of growth, Asian companies are well-positioned to take advantage of the relative weakness of their Western competitors.
Markson-Brown makes the point that… read more here