Henderson Global Technology fund
Andy Parsons, head of investment research at The Share Centre, picks Technology as the growth sector for investors and names the Henderson Global Technology fund as a sector favourite.
"Ever since the burst of the tech bubble in 1999 when the height of the fashion was to develop anything with the prefix dotcom after it, investment within the technology sector has tailed off significantly as investors have been reluctant to expose themselves to technology fearing another potential bubble.
"However, times are changing and appetite is returning. An example of the opportunities the sector has to offer is the growth of data and mobile phone usage. They are now embedded in our everyday lives with people preferring to reduce budgets elsewhere than surrender their personal phone or tablet.
"Mobile phone usage and data services have proven fairly defensive in recent years. The thirst for data services has been driven by the advent of the smart phone and mobile tablets allowing users to access whatever they want, where ever they want. Future demand is likely to be driven by the evolution of 4G on mobile devices, a service which should mean content can be downloaded quicker and users will no longer have to endure slow websites and buffering screens. Demand for data centres is also likely to increase as investment in Cloud services and global positioning grows.
"As companies in this increasingly connected global world seek to compete, private companies investment in technology is expected to increase. Advances in mobile computing, social media, data management and analytics, information technology and cloud computing will all have a part to play in this. Cloud computing is expected to have a significant impact on companies in the years to come. This will improve competiveness and reduce high IT infrastructure overheads. Data protection and security are major concerns, but it is the continual technological developments that will ensure that Cloud computing may well become the new norm.
"The Henderson Global Technology fund is co-managed by Stuart O'Gorman who has been at the helm since January 2001 and Gordon Happell (January 2013) and looks at the drivers of technology demand and seeks to grow returns from them.
"The managers identify and invest in companies that have clear growth themes, such as online advertising, connectivity, data growth, paperless payment and ecommerce. In terms of market cap spectrum, the fund will have a bias towards large cap holdings and focus on those companies with a perceived undervalued growth opportunity.
"The fund benefits from a shift in demographics helping to drive technological adoption. In some developing countries, demand for mobile phones is far greater than that of land lines. It is also placed to benefit from changes in consumer behaviour as online shopping continues to grow and technology companies take advantage of this.
The fund's portfolio is currently predominantly (77.10%) invested in the US and its top five holdings are some of the world's best known brands; Google, Samsung, IBM, Apple and Microsoft."