Schroders will be running with a portfolio of 50 to 60 stocks in its pan-European technology fund wi...
Schroders will be running with a portfolio of 50 to 60 stocks in its pan-European technology fund with a bias towards small caps.
Schroder EuroTech will use a universe of around 510 European technology stocks, which will be filtered down to a focused list of 100.
The group's 10 strong European technology team, led by Michael Grant, who will be the lead manager of the fund, will use quantitative techniques to screen the stock universe. It will consider factors such as earnings growth and earnings surprise as well as absolute and relative P/Es and price to sales ratios. Grant currently runs the offshore SISF Global Technology fund for the group and is head of Schroders' global technology research team in London.
The fund, to be launched on 22 May, will have 55.5% of its assets in companies with a market cap of less than E5bn, where Schroders sees some of the best growth opportunities. Around 11% of the fund will be in stocks with a market cap above E50bn.
Schroders is splitting the European technology universe, which it characterises as the fifth largest equity asset class in the world, into high growth companies such as software and internet stocks, cyclical growth companies including semiconductor firms and stable growth stocks such as telecom services.
A variety of industry themes will also be followed in constructing the portfolio including the business to business potential of the internet and the growth of web-based consulting. Other themes, which will be followed will include the emerging dominance of wireless communications and the construction of communications infrastructure.
Grant said: "Europe will experience rapid internet take-up over the next five years with over 110 million Europeans online by 2004. Europe's online development will be fragmented and early internet leaders will fade. Consumer e-commerce will be a E17bn industry by 2004, led by the key markets of Germany and the UK. The early leadership of the large telecom companies will gradually give way to the emergence of European internet start-ups, particularly in the UK and Germany. Local knowledge will remain important, which will help the European players compete with their US counterparts.
"Technological advancement in Europe is accelerating and is where the US was two to three years ago.
"The technology world has now become more focused on communications and not the PC - a doubling of band width today is a much more important development than a doubling in microprocessor speed and Europe is well known for its leadership in wireless communications."
One of the large cap stocks the fund will hold is Ericsson. Grant is also keen on Comptel, a Finnish software firm.
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