Net assets in the Polar Capital Technology Trust have fallen by 40% for the year ending 30 April, th...
Net assets in the Polar Capital Technology Trust have fallen by 40% for the year ending 30 April, the group told shareholders in announcing its first results since the company changed management firms from Henderson Global Investors.
Preliminary results for the year ending 30 April 2001 showed the trust's net assets fell from £668.7m to £401.3m, compared to the Dow Jones Global Technology Index, which dropped 47% over the year.
Brian Ashford-Russell, director at Polar Capital Partners, said: 'We are not happy with the results in what has been a very disappointing year. There is a lot of work to do to get assets back to where they were. We had a bad second half of the year and are now very focused on getting the trust right and back up there.
'We no longer have the distraction of the setting up of our business and we think we can produce significant returns over the next three years.'
Ashford-Russell said the vast majority of damage was done from the end of September 2000 to the end of January 2001. He said: 'Over this time we failed to properly implement a top-down strategy that was pretty defensive, and as such we went into the slowdown with too much beta in the portfolio.'
In hindsight, Ashford-Russell said another mistake was that after drastically cutting the trust's weighting in Europe, the money was put back into the US rather than in cash.
Ashford-Russell said the lack of visibility in earnings estimates is clearly hitting consumer sentiment which explains why there is a lot of cash in the market at present.
He said: 'If we see consumer sentiment collapse in the US and a prolonged recession then all bets in technology will be off. But this is not the case at the moment. Consumers have been very resilient and we are working on the assumption that the Nasdaq will hit 2500 to 2700 points in the first four months of 2002. At present we think the risk/reward below 2000 points in the Nasdaq is a very attractive opportunity.'www.ifaonline.co.uk
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