Investment trust insider on tech trusts – James Carthew: Two tech trusts you should hold for the AI revolution
One of the weirder things about the investment companies market is that some of its most successful funds are trading at significant discounts. I could point to all sorts of examples but the one I want to highlight is Polar Capital Technology (PCT), standing about 9.5% below net asset value (NAV) despite having made shareholders almost 46% over the past 12 months and an incredible 20% per year on average over the past 10 years.
That success is reflected in its size. With a market value of almost £3.5bn, PCT is not far off qualifying for the FTSE 100. The assets under the management of the technology team at Polar are approaching £10bn. The team has grown and is now reckoned to be one of the largest in Europe.
PCT’s returns reflect the extraordinarily strong run within the technology sector, but as we know that has largely been concentrated within stocks viewed as beneficiaries of the advances in artificial intelligence (AI). The trust benchmarks itself against the Dow Jones Global Technology index and did well to beat it in the last financial year to 31 March.
The benchmark is imperfect in that PCT’s remit is to have a portfolio diversified across regions and sectors to reduce investment risk. By contrast, the index is very concentrated in some mega-cap names. PCT’s commitment to manage risk in this way is the major differentiator between it and Allianz Technology Trust (ATT) and means that its returns tend to be… read more here