Investors who continue to shun technology risk missing out on what could be a significant revival in...
Investors who continue to shun technology risk missing out on what could be a significant revival in the next two to three years according to Paris-based IT Asset Management, which manages the sector's top-ranked unit trust.
The CF Technology Growth fund leads the sector with a 28.5% loss during the three years to 17 June according to Standard & Poor's data, compared to the 36.7% loss of second-placed SocGen Technology, but that pain could soon be replaced by improved returns.
ITAM founder and chairman Muriel Faure says too many investors in the UK have the blinkers on when it comes to considering technology, which ought to form part of any balanced portfolio, providing the prices are right.
"Technology has to come with a market plan, but there are opportunities out there" she says.
"We are looking towards new markets and we are seeing more institutions going into technology because we are getting some good prices now.
ITAM's management success is down to following long-term investment themes, then finding out which companies are going to do best in those areas.
For example, despite the ongoing technology and telecoms downturn, ITAM believes that semiconductors, software and digital consumer electronics are likely to provide some significant returns for those willing to get in now.
"The first to turn around will be semiconductors because that underpins the entire IT sector. That includes passive components, while in terms of processors, the US looks like losing its lead to fabs such as Taiwan Semiconductor, which account for an increasing amount of the semiconductor value chain."
"In software, Microsoft is expensive at the moment because it has been seen as a defensive play, but we are more inclined towards firms such as Check Point Software. Its shares trade at around $13, but it is holding the eqivalent of $5 cash per share.
"In the consumer electronics market it is worth noting that sales of DVD players will hit about 400 million, which is the same as mobile phones, for example."
ITAM also does not put money into unquoted companies, preferring others to take on the risk associated with finding a suitable exit price for early stage investors.
Putting the tech into protection
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Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation