By Jenne Mannion Newton will next month launch its technology and new economy fund to be run by US f...
By Jenne Mannion
Newton will next month launch its technology and new economy fund to be run by US fund manager Trish Bridson.
The Global Innovation unit trust will hold not only tech stocks but also companies that are beneficiaries of technology.
The sub fund of Newton's Oeic goes live on 6 April but was seeded last week. Bridson will run the portfolio with technology and telecoms specialists Fiorangelo Salvatorelli and Fati Naraghi. The team will also draw on the expertise of Newton's research group and its pool of regional specialists.
The Newton North American fund managed by Bridson is ranked fourth out of 37 in the North American sector over one year, with this performance largely attributed to the high exposure to technology stocks.
Newton has identified five key themes, to be contained in the Global Innovation Fund, reflecting Newton's approach to thematic investment.
The first of these is optoelectronics, a method of sending data by a combination of light and electronics which should allow for substantial increases in data traffic. The second is described as 'distributed systems'. This refers to the ability to access information from a variety of sources rather than a single one such as a mainframe computer. Newton expects this to gain increasing prominence as internet usage accelerates.
Growth in business-to-business internet usage, semiconductors and the genomic revolution, which is helping to map out human DNA, are the other key themes in the portfolio.
The team will take a bottom-up approach to stock selection, investing in companies that will benefit most from these themes regardless of sector or region. The fund will fall into the global specialist sector and be benchmarked against its peer group.
Salvatorelli said: "We plan not to focus on just information technology hardware but on all levels of science where there is significant intellectual property leading to growth. The fund will also invest in companies using technology to gain competitive edge, regardless of sector."
There will be a maximum of 70 holdings in the portfolio, although Bridson said the team aimed to keep this more focused by holding about 50 companies. Individual holdings are unlikely to exceed more than 3% to 4% of the fund.
Top 10 holdings at launch are Nortel Networks, Verisign, Hewlett-Packard, Xerox, AT&T, Vodafone, Ericsson, ST Microelectronics, Taiwan Semiconductor and China Telecom.
Naraghi said about two thirds of the fund will contain large and mid cap companies, to create liquidity, while the remainder will consist of small cap companies. Around 45% of the fund will be invested in the US.
There is a 1% discount on the standard initial charge of 4% until 30 April. The annual fee is 1.5%. IFAs are offered 3% front-end commission and up to 0.5% renewal. Minimum initial lump sum investment is £1,000 and minimum subsequent investment is £250. Minimum monthly payments are £50 a month.
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