The Polar Capital Technology trust has achieved a near 19 per rise in its net asset value (NAV) in the six months to the end of October.
Over the period the £720m portfolio witnessed its ordinary share price jump 19.23 per cent, while its benchmark, the Dow Jones World Technology Index rose 16.34 per cent.
The vehicle’s manager Ben Rogoff, who counts technology giants Google, Facebook, Microsoft and Apple among his top holdings says however the most significant positive contributor to performance over the period was the sharp rebound in a number of his high growth stocks including LinkedIn, IT search company Splunk and US software group Tableau.
He adds that the trust also benefited from underweight / zero positions in a number of legacy companies that underperformed during the period including Canon, Oracle, SAP and Samsung.
He says: “The most significant of these incumbent laggards was IBM, our zero weighting providing a welcome boost to relative performance. As in prior periods, M&A activity also made a positive contribution as one of our positions – Concur Technology – was acquired at a healthy premium.”
Looking ahead while Rogoff admits absolute valuations are no longer cheap he is optimistic that global equities will add to their first half gains over the remainder of the year.
“Even after outpacing Treasuries by circa 40 per cent in 2013 – stocks continue to look attractive versus most alternatives and especially so against cash where negative returns appear all but certain,” he adds.
However despite the fact that the current economic backdrop will not last, he anticipates that policymakers will continue to tread carefully “given the uneven recovery and the risks associated with deflation”.
While headline valuations have expanded broadly in line with the market over the half year, Rogoff believes the technology sector continues to look relatively attractive as it trades “at just 1.0x the market multiple while boasting 55% of total US non-financial corporate cash”.
However, he adds that IT budgets, “the key determinant of revenue growth for most incumbent companies” are expected to grow just 2.6% this year which would represent another year where industry growth failed to keep pace with global GDP.