It is vital to ask technology fund managers the right questions before investing in their funds, acc...
It is vital to ask technology fund managers the right questions before investing in their funds, according to Greg Kerr, the head of global equities at M&G.
Kerr said: "Grill the fund manager. Don't just lob an easy question and then move on to the next."
It is important to find out an individual fund manager's view of the industry, Kerr said. He added: "It is unlikely that a fund manager will think of the industry in such backwards terms as hardware, software and semiconductors, for example. He might think the mobile phones industry is a strong area to invest in but there is no such specific sector yet. Mobiles cover a wide-range of the traditionally segmented sectors. Furthermore, make sure you know which index your fund manager uses and why."
Kerr said that as the Nasdaq 100 is a highly concentrated index, with its top 10 stocks making up 40% of the whole, volatility is increasing. With these facts in mind, Kerr believes it is important to determine whether the investors risk profile matches that of the fund manager. In addition, Kerr stressed the importance of determining how, or indeed whether, the fund manager values companies.
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