Polar Capital Technology Trust saw net assets improve 35% from 189.8p a share to 255.9p in the year to April 20th and its share price did even better, gaining 48% as the discount between share price and net assets narrowed.
This was an impressive performance though it should be remembered that stockmarkets generally did well in the period. The benchmark was up 36% over the 12 months.
The dramatic growth in availability of cheap broadband communications is singled out as the most important factor.
Chairman Richard Wakeling says: ‘The global economy has been buoyant with a healthy increase in the number of its cylinders firing in the right direction. In particular, the Japanese economy gathered more self sustaining momentum while that in Europe has been led upwards by an increasingly confident corporate sector.
‘Growth elsewhere in Asia has been robust and broader based, while in the US there are finally some signs that the business sector is taking up the running from the debt-burdened but still surprisingly resilient household sector.’
Wakeling notes that while stockmarket attention has focused on energy and mining, technology shares have managed to keep pace with the market. Not all parts of the tech market did well – for instance the PC market has long matured – but technology earnings on the whole rose strongly, he says.
‘Smaller cap technology stocks saw an encouraging return of investor interest, a development fully justified by the relative earnings performance of the emerging generation of technology companies as compared to their more mature counterparts,’ he adds.
With a wave of new technologies emerging, the Polar managers feel justified in their belief that a new technology cycle has begun. With capital spending beginning to recovery around the world, technology companies should be significant beneficiaries.
A couple of important changes now come into effect. Respected fund manager Brian Ashford-Russell took a sabbatical during the final quarter of the financial year and has now handed over on a permanent basis to Ben Rogoff, who has run the US portfolio for the past three years. Asian manager Craig Mercer is his deputy.
The other change is that the fund is moving from a composite benchmark to the Dow Jones Technology Index, which will provide a more appropriate and easily followed comparison.
Polar shares peaked at 264p in January but have, like the stockmarket, come off the boil since March and are now down to 199p, having fallen 7.25p on the results.
