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How UK investors can cash in on the digital revolution

Don’t have a costly Kodak moment: How UK investors can cash in on the digital revolution and tech stocks

By JEFF PRESTRIDGE, FINANCIAL MAIL ON SUNDAY PUBLISHED: 21:53, 13 June 2020 | UPDATED: 09:42, 14 June 2020

Technology is very much of the moment. It’s the investment theme that has driven the US stock market to claw back all the losses it suffered earlier this year – with the big five tech stocks (Alphabet, Amazon, Apple, Facebook and Microsoft) leading the way…

Said Tazi, an investment manager with Swiss bank SYZ, says coronavirus has fast-forwarded the introduction of a new digital age and warns that companies which do not embrace technology ‘might not remain competitive’.

So, how do investors embrace such ‘disruptive technology’ within their portfolios to positive effect?

HOW TO GAIN ACCESS TO THE DISRUPTERS 

For investors who want exposure to the big technology giants – Apple, Alphabet, Amazon, Facebook and Microsoft – the best approach is to buy an investment fund that holds all or some of these companies in their portfolio. The simplest and cheapest option is to purchase a fund that tracks the performance of the S&P500 Index…

An alternative ‘tech’ approach is to buy a fund run by a manager who passionately believes that the tech giants – despite their inflated prices – still provide long-term growth potential. As a result, such stocks dominate their portfolios.

For example, investment trust Scottish Mortgage – managed by Edinburgh-based investment house Baillie Gifford – has more than 10 per cent of its assets in Amazon…

Other possible options include investment trust BlackRock Throgmorton and fund Sarasin Thematic Global Equity.

Throgmorton has a focus on identifying tomorrow’s winners, albeit in the UK smaller companies space. Research analysts QuotedData says ‘identifying industry change, investing in tomorrow’s winners, and shorting unsustainable business models [profiting from the shares falling in value], are core parts of the trust’s investment process’.

Read more here

 

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