What makes Polar Capital Technology Trust tick? The popular investment trust is having a tougher time of late
T
his year has been ugly for technology investors. The challenges facing equity markets have combined to form one of biggest headwinds to investment returns for decades, including inflation soaring to levels not seen in decades. The feeling that things will get worse before they improve continues to dominate the investment mood, and some disappointing earnings updates and lukewarm guidance have seen the technology sector give back some of its considerable long-term outperformance of the wider markets. It has also seen technology investment trust discounts widen. Polar Capital Technology Trust (PCT) remains the largest tech specialist investment trust, worth around £2.6 billion. Investors will find many of the world’s largest and best-known tech
companies prominent in the portfolio, including Google parent Microsoft (MSFT:NASDAQ), Apple (AAPL:NASDAQ) and Alphabet (GOOG:NASDAQ) as the trust’s three largest holdings. Being what manager Ben Rogoff calls ‘benchmark aware’ means some very large technology stocks simply must be owned. This can sometimes lead to accusations of index hugging. Only half of the Dow Jones Global Technology benchmark’s top 10 weightings feature in Polar Capital Technology’s own top 10, while four of the other five – Broadcom (AVGO:NASDAQ), Adobe (ADBE:NASDAQ), Intel (INTC:NASDAQ) and Cisco Systems (CSCO:NASDAQ) – don’t even feature in Polar’s top 15 positions, as of 9 June. With a portfolio of typically around 100 to 120 stocks, Polar Capital Technology’s investment strategy is as much about finessing its stakes to
Polar Capital Technology Trust: Top 10 versus benchmark Polar Capital Technology Trust (9 June 2022)
Benchmark (31 May 2022)
Microsoft
Apple
Apple
Microsoft
Alphabet
Alphabet A
Advanced Micro Devices
Alphabet C
TSMC
Nvidia
Samsung
Meta Platforms
Nvidia
Broadcom
ServiceNow
Adobe
ASML
Cisco Systems
Amazon
Intel
Table: Sharesmagazine.co.uk • Source: Polar Capital Technology, S&P Global. Benchmark = Dow Jones Global Technology index
30 June 2022 | SHARES |
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