Polar Capital alters tech trust focus

Brian Ashford-Russell and the team of former Henderson technology fund managers at Polar Capital are adopting a barbell strategy in the Henderson Technology investment trust, which is soon to be renamed Polar Capital Technology.

The managers of the trust, which has received the backing of Merrill Lynch's Charles Cade as one of the best options for private investors looking for a well-diversified global technology portfolio, have moved from a primarily sub-sector asset allocation to classifying stocks according to their beta.

Each stock is classified as aggressive, neutral or defensive, and the barbell will consist of defensive companies with good visible earnings in less economically sensitive areas and a basket of stocks with aggressive growth profiles. The change of strategy, reported by Cade in a special report on the trust, reflects the belief that pure momentum investing will not return to markets for the foreseeable future, and that, in general, firms with P/E ratios of 40 times or greater will struggle as investors are focused on visible earnings.

The team is looking to reduce cash weightings. The cash and bond weighting was 23% of the fund on 28 February. The emphasis remains on the US as the team believes that Europe is behind on earnings revisions. It is also looking towards Japanese domestics and considering raising exposure to the more cyclical semi-conductor stocks in Asia.

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