By Jenne Mannion The Sarasin Websar fund is taking a cautious view on the global technology sector b...
By Jenne Mannion
The Sarasin Websar fund is taking a cautious view on the global technology sector by focusing on traditional companies using the internet to increase earnings.
Cooper said: "This is not a technology fund, it is an e-commerce portfolio. E-commerce is the single most important factor influencing company profitability today. There are ways of capitalising on the strong growth in e-commerce without paying the excessive valuations associated with the more obvious technology companies." The fund is based on four themes.
Two key themes are growth enhancement, which includes traditional,non-technology companies using the internet to transform their growth characteristics, and the productivity enhancer, which addresses companies that can increase efficiency and cut cost using the internet.
The other themes are the virtual company, including the major blue chip internet companies, and the networked world, which targets providers of internet content and access.
On a neutral asset allocation view, the fund would contain 30% each in the growth and productivity enhancing themes, and 20% in both the virtual and the networked world themes.
The portfolio is currently overweight the first two, underweight in virtual companies and neutral in the networked world.
Websar, originally launched as a Luxembourg Sicav in October last year, now has assets of £130m.
An Oeic version was launched to the UK in March 2000, and has £7m under management.
Holdings chosen according to the growth enhancer theme are Prudential, through its internet bank Egg, and Intimate Brands, which has moved to expand sales of toiletries via the net.
Cooper said: "Identifying companies in the growth enhancer theme has been the biggest challenge because the markets had been fast to recognise that an effective internet strategy can enhance company revenues, and this is often reflected in the share price."
Within the productivity enhancer theme, holdings include WH Smith and BP Amoco, which are benefiting from effective business-to-business strategies. Cooper said many companies in this sector have low valuations, due to low margins, but are using the internet to cut costs.
Virtual companies include TMP Worldwide, which owns the online recruitment company Monster.com, and Yahoo!. The networked world companies include Ericsson, Sun Microsystems and Nokia.
The fund contains 58 stocks in total, and the standard range is 50-70 holdings.
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