By Mohamed Ali Bernat The strength of French technology firms has helped kick-start the economy and...
By Mohamed Ali Bernat
The strength of French technology firms has helped kick-start the economy and aided the performance of Invesco's £23m French Growth fund, according to its fund manager Chrysoula Zervoudakis.
The fund had losses of 7.1% on a bid-to-bid basis in the three months to 11 October, ranking at 32 out of 54 funds in the specialist sector. It was ranked eight out of 37 funds over 12 months with offer to bid gains of 60.8%. Over three years the fund ranked nine out of 29 funds with growth of 137.5%.
Zervoudakis said French tech firms have been establishing themselves at the forefront of the internet revolution over the past three years.
She added: "France has always been quite advanced in terms of internet design and is in the vanguard of videogames with Infrogrames, the second biggest producer in the world."
Zervoudakis said the French Nouveau Marche was host to many good technology stocks such as Infogrames and fellow games producer Kalisto, as well as semiconductor-related firm Soitec. She has recently reduced exposure to telecom sector firms such as France Telecom, Bouygues, Vivendi and Avenir Telecom but is still impressed by internet company Wanadoo, which was spun off from France Telecom, although the parent company still holds the majority stake in the company.
Another tech firm spun off by France Telecom is Infovista, a leading firm in the field of software used to check the volume of data flowing through telephony systems. Invesco French Growth has funds in this along with web agencies Cross Systems and Valtech.
Zervoudakis said she was also keen on Ilog, which produces internet software to help designers build their sites faster and has strong worldwide contracts. Non-internet firms are also helping lead the French presence in the new economy, according to Zervoudakis.
She said: "Altron, an engineering consultant for high-tech businesses is the worldwide number one in its field and Thomson is the number one producer of set-top boxes in the US as well as producing a lot of the software used by those devices."
Telecoms group Alcatel, semiconductor technology company Picogiga and e-business company Business Objects are among Zervoudakis' top 10 holdings at 6%, 2.4% and 5.9% portfolio weightings respectively, along with a 2.9% holding in Aventis, the Franco-German life sciences company.
France's markets were hit as badly as others following the tech stock corrections in March and April of this year, according to Zervoudakis but it remains one of the fastest growing economies in Europe with 3.1% growth in consumer spending.
Technology and media stocks account for 13.3% of the CAC40, industry accounts for 25.8% of the index, insurers 13.8% and pharmaceuticals some 15%. Because the French Growth fund is not technology specific, Zervoudakis has holdings in finance and hopes to take advantage of the booming French economy with holdings in companies such as LVMH, one of the world's largest luxury goods groups.
The two largest companies in France by market weighting are petroleum company Total, which makes up 7% in the fund, and France Telecom, a 6% holding.
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