Chartwell Investment Management says it has found genuine evidence of normality returning to th...
Chartwell Investment Management says it has found genuine evidence of normality returning to the tech market.
The assertion is based on discounts Chartwell has noticed returning to certain tech investment trusts. Chartwell points to two trusts in particular, Polar Capital Technology and Finsbury Technology, which are both now trading at discounts.
However, during the TMT rally and for the whole of 2000 and a good chunk of 2001, Chartwell noticed that tech investment trusts, particularly Finsbury Tech and Polar Capital Technology (formerly Henderson Global Technology), traded on a premium to their net asset value.
During this time, Chartwell was unable to find a good reason why anyone would pay over the odds for technology stocks (within a trust) when they were having such a torrid time.
The current observation - that Polar Capital Technology and Finsbury Technology are now trading at a discount, along with a host of others such as Fleming Tech and Amerindo - argues Chartwell, suggests some sense has started to reappear in tech investment trust valuations. Polar Capital Technology and Finsbury Tech are both at a 9% discount and Amerindo at a 26% discount.
Chartwell does concede, however this isn't a buying signal, except for the more adventurous investor.
"For investors looking to invest in tech investment trusts then both Finsbury Technology and Polar Capital Technology would be worth considering but we would suggest leaving it a while just yet.
"Amerindo may also be worth considering especially as it is now on a large discount, that's not to say the discount won't get larger but at least you aren't paying over the odds for a very high risk investment," says a spokesman for Chartwell.
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